Judge rules in favour of PwC partner told to retire
PwC has announced hundreds of jobs will go as the consultancy firm looks to "simplify" its business. Photo: AAP
The forced retirement of PwC partner Richard Gregg does not satisfy the firm’s partnership agreement, a judge has ruled.
Mr Gregg was told he would have to retire amid the damaging fallout from reports confidential information from the Australian government was shared with PwC’s private clients, which has prompted wider scrutiny of the big four accounting firms and their attached consulting businesses.
He had been a PwC partner since July 2013, admitted under a deed made in 1997.
The partnership agreement says a partner can be required to retire if management makes a recommendation to the board of partners.
“If the board of partners determines that you should be required to retire, you will, without any further act, cease to be a partner of the firm,” Mr Gregg was informed by way of a letter from acting senior partner Kristin Stubbins, two days after Mr Gregg marked 10 years as a partner, in July.
Mr Gregg was earlier directed to go on special leave in May as an internal review took place.
However, he argued the recommendation did not meet the requirements of the partnership agreement by failing to adequately set out why he should retire, and NSW Supreme Court chief equity judge Justice David Hammerschlag agreed on Friday.
The central controversy in the case was whether management met a contractual requirement to specify reasons for its recommendation.
“It is squarely a case about a contract and the qualities of a bargain,” the judge said.
PwC did not assert Mr Gregg materially breached the partnership agreement, and acknowledged the recommendation he retire was not based on a finding he misused confidential information from government clients.
“There has, from about January of this year, been extensive media coverage about alleged misuse of confidential government information by the accounting firm,” the judge noted.
Mr Gregg is therefore entitled to his sought declaratory relief and the judge ordered the parties to agree on the terms of it within a week.
“If they are unable to agree on those terms, the court will settle them,” he said.
PwC was also provisionally ordered to pay Mr Gregg’s costs.
– AAP
