SCENARIO
In April 2004, Mike was one of the two original General Managers of Poppin Firewords Pty Ltd. His role included negotiating agreements with local councils and the NSW State Government for the sale and installation of pyrotechnics in Sydney and its surrounds.Mike’s initial contract was for four years, with the option for an extension of four years if mutually agreed. That option was exercised. At the end of that term, an amendment to the contract extended it for a further five year fixed term. The expiry date then specified was 31 March 2017. Mike’s contract specified an annual salary of $310,000 and an annual allocation of 2000 shares, as well as a 4% ‘loyalty bonus’ for each year of satisfactorily completed service, payable after his annual salary review.In January 2015, Poppin’s Board of Directors decided to reassign Mike’s negotiation responsibilities to another senior manager, Alison. This was not what Mike had recommended to the Board.The next day Mike sent two emails to Alison:• The first email alleged that Alison was underperforming and had acted in an unprofessional manner;• The second email informed Alison of the Board’s decision and also asked whether she wanted to take on these extra negotiation responsibilities or if she thought some different arrangement would be more suitable.When the Board found out that this had happened, they informed Mike that his actions were an attempt to get around the Board’s decision as well as placing unfair pressure on Alison.  The Board said this amounted to Mike breaching his contract and Poppin’s code of conduct. The Board informed Mike that he had a week to remedy this, requiring Mike to:• Give the Board an assurance, in writing, that he would publicly support all of their decisions; and• Unconditionally withdraw the email about performance and professionalism; and give an unconditional written apology to Alison.The Chairman also provided Mike with his preferred wording for an apology letter, which was:Please accept my unreserved apology for issuing the email about your performance and professionalism. My actions were a lapse of judgment. I have been utterly disrespectful, inappropriate and unprofessional. I have failed in my duties to the company and its staff, and all deserve better from me as General Manager.
I retract all of the comments that I made in the email. I look forward to working with you in a cordial, positive and respectful work atmosphere.
When Mike asked the Chairman if the Board’s objective was to terminate his employment, the Chairman said, “no, it’s to remedy specific problems and if that’s done then no further action will be required”.Mike gave the required assurance, in writing, to the Board about supporting their decisions.  He also gave a written apology to Alison, but did not use the exact wording proposed by the Chairman. Instead, Mike wrote:Please accept my unreserved apology for issuing the email about your performance and professionalism, which may have led you to think that I was placing unacceptable pressure upon you.
I retract all of the comments that I made in the email. I look forward to working with you in a cordial, positive and respectful work atmosphere.
Mike continued as General Manager and also directed any enquiries about negotiating with councils and the NSW Government to Alison, consistent with her new responsibilities.Three weeks later, the Board took steps to bring their association with Mike to an end.  The Chairman and Deputy Chairman of the Board met with Mike and asked him to voluntarily resign. He refused. They then informed him that if he didn’t resign his contract would be terminated. Mike again refused to resign. The same day Mike was given a letter stating that his employment was terminated, effective immediately.The clause of his employment contract that they used to justify the termination included the following provision:The Company may at its reasonable discretion terminate a senior manager if …  at any time that manager … commits gross misconduct or commits any serious or persistent breach of any of the provisions in this Agreement and the breach is not remedied within 7 days of receiving notice from the company giving details of the breach.
Mike wants to take action against Poppin. The company argues that Mike committed serious misconduct and that it was entitled to take the action that it did. (Mike had also previously hired an investigator at the company’s expense to investigate allegations made against number of senior staff, including Alison, but had not disclosed this to the Board. The Board became aware of it well before the termination, but only sought to rely on it afterwards as further evidence of misconduct).
You are the partner of a small employment law firm.  Mike has come to you and retained you for advice.  Should he commence legal action against Poppin?  If so, on what grounds?  Further, what are his prospects of success (and the likely remedies he might obtain)?

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