Court finds the firm failed to show its reasons for acting against Richard Gregg in the wake of tax scandal.
PwC partner wins reprieve from forced retirement
The NSW Supreme Court has blocked PwC from booting out one of its partners over his alleged involvement in the firm’s tax scandal.
Research and development partner Richard Gregg, a partner since July 2013, can remain at the firm after the court found the consultancy giant had failed to identify its reasons and how it arrived at them in a notice requesting his retirement.
The recommendation for his retirement was made in light of news that partners within the firm had disclosed confidential information obtained by the ATO to multinational clients.
The finding could open the firm up to further proceedings from other ousted partners.
In May this year, PwC asked Mr Gregg to go on special leave pending an internal review and told not to contact partners or staff, visit the premises, access the computes or communicate with media.
On 3 July, PwC released a statement saying it had reached conclusions in its investigation into the handling of confidential Treasury information and past failures in professional, ethical or leadership responsibilities.
It said that eight partners had exited or were in the process of being removed from the partnership (it can safely be inferred that Gregg was one of them).
Supreme Court Justice David Hammerschlag found the recommendation, made under the firm’s partnership agreement, was invalid.
“The recommendation does not identify, or sufficiently identify, the basal facts constituting the conduct of Mr Gregg upon which management’s view is based,” Justice Hammerschlag said.
“Additionally, it also fails to expose the actual path of reasoning by which management arrived at its view in that the conduct identified meets one or more of the thresholds and how it arrived at its view.”
The court was of the view that while the recommendation did not need to be “perfect”, it should have enabled the partner to have a “just opportunity” to respond and the board of partners needed to act “faithfully and in good faith” to decide.
Justice Hammerschlag clarified the current proceedings “do not concern the merit, or lack of merit, as the case may be, of any complaint against Mr Gregg”.
He gave the parties a week to settle on any payout and legal costs, or the court would decide the matter.