Legal

Former employee launches $4.6 million lawsuit against Clive Palmer over “sham contract”

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A former close friend of Clive Palmer is suing the mining magnate turned politician in the Brisbane Supreme Court for $4.6 million over an employment contract he says was a “sham”.

William Schoch, who also previously stood as a candidate for the Palmer United Party in 2013, lodged a claim against Palmer and his companies Mineralogy and Queensland Nickel in April, with the trial beginning yesterday.

Palmer hired William Schoch as the chief financial officer for Palmer’s China First coal project in 2011, and later as the manager of Palmer’s Coolum Resort on the Sunshine Coast, via a verbal contract that Schoch alleges was to be worth $5 million, or $1 million a year over a five-year period.

However, Schoch told the Brisbane Supreme Court this week his annual salary was initially $100,000, later rising to $150,000 in 2012.

Schoch had signed the written employment contract but he told the court he believed the “deal” he had with Palmer was still valid and he would receive the additional money at a later date as a bonus, reports Nine News.

“He said that I’d be on a starting salary to start with and the rest of the money would come in later,” Schoch told the court yesterday.

But when Schoch queried his salary in December 2013, he said Palmer fired him over the phone, allegedly saying “you don’t have a contract for $5 million. You have a contract for f—ing $150,000. Leave by Tuesday. Sue me.”

Schoch is alleging he was duped into signing a “sham” employment contract and is seeking $4.6 million in damages.

Palmer and his companies have disputed the claim and the trial has been listed to run for four days.

Workplace lawyer Peter Vitale told SmartCompany the outcome of the case will likely be determined by questions about if the phone conversation that Schoch alleges took place “truly reflected the intent of the two parties”.

“And if it did, why it wasn’t specifically referred to in the written contract,” Vitale says.

“There will be a significant question of the court trying to determine what it believes is the common intent of the parties.”

Vitale says it is also possible that Schoch has made allegations of deceptive and misleading conduct under Australian Consumer Law and if this is the case, the court will also likely assess if there was any degree of exaggeration in the commercial negotiations for the job.

“It will focus very carefully on precisely what Mr Palmer said,” Vitale says.

Vitale says all employers “need to be careful about what sort of promises you make” when negotiating contracts with employees and “whether you intend them to be some form of encouragement or inducement”.

“It can be a fine line between something that is just commercial banter and something that becomes, in effect, a legally enforceable promise,” he says. 

This is not the first time Palmer has been the subject of legal action over a workplace dispute.

In September last year, another former employee of the Coolum resort filed an unfair dismissal claim against Palmer before the Fair Work Commission, alleging Palmer called him a “fat c—“ before dismissing him.

Peter Yates, who worked as an assistant food and beverage manager at the resort between 1998 and 2014, claimed he was never given a letter of termination and was not paid out his annual leave, long service leave and other entitlements.

The dispute was resolved when the parties reached a confidential settlement over the claims in September 2014.

SmartCompany contacted Clive Palmer but did not receive a response prior to publication. SmartCompany was unable to contact William Schoch.

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