Case Review: Aiezza v Victorian WorkCover Authority [2011] VMC 30A - Estoppel if term not enforced — Enforcing employment contract

A long-standing workplace custom about company cars collided with a written policy that had gathered dust. An occupational hygienist at the Victorian WorkCover Authority had, for more than a decade, the use of a company vehicle.

Her contract and the organisation’s policy said private use was permitted only if at least 65% of driving was for business and supported by logbooks. In reality, the 65% threshold was widely ignored and logbooks were no longer kept. When the employer decided to revive strict enforcement, the employee did not meet the threshold and the car was withdrawn. She challenged the decision.

What was really in dispute

Could an employer suddenly rely on a policy term it had allowed to lapse in practice for many years, despite it being written into contracts and policies?

How the court approached it

The Magistrates’ Court treated the long history as the key fact. Over many years, both sides behaved on the shared assumption that the car could be used privately without strict adherence to the 65% rule or logbooks. That common assumption was not a one-off; it was the everyday reality across the workplace. On those facts, the court held that an estoppel by convention arose. In simple terms, where parties conduct themselves on a shared understanding and act on it over time, one of them can be prevented (or estopped) from suddenly turning around and insisting on the strict written position, at least without clear, prospective change.

Case Review: Aiezza v Victorian WorkCover Authority [2011] VMC 30A Estoppel if term not enforced — Enforcing employment contract

The outcome

The employer was estopped from asserting the 65% rule against the employee in these circumstances. The court awarded compensation of about $30,000 to reflect the loss of the car benefit. The reasoning was grounded in the duration and consistency of the practice, its acceptance by management, and the employee’s reasonable assumption that the arrangement would continue while her role required a car.

Why this matters

Workplace rights and obligations are not determined by documents alone. Courts pay close attention to what actually happens day-to-day, particularly where a policy has been set aside in practice. If an organisation wants to change course and re-assert a dormant rule, clarity and prospectivity matter. Sudden reversal after years of non-enforcement risks findings that an estoppel by convention prevents the employer from resiling from the established position for existing arrangements.

Key points in plain language

• Written terms are important, but consistent practice over time can shape the legal position between employer and employee.

• Estoppel by convention can arise where both sides share and act on the same assumption for a lengthy period.

• Reviving a long-ignored policy without clear, forward-looking steps can be found unconscionable in its effect on existing benefits.• Where a benefit has been routinely provided and approved, withdrawing it abruptly may attract compensation.

Case citation

Aiezza v Victorian WorkCover Authority [2011] VMC 30 (Magistrates’ Court of Victoria).