A million reasons to be mindful of termination notice periods

August, 2014

By Clayton Payne

A former employee of a company has recently been awarded damages in excess of $1,000,000 after her former employer was found to have terminated her employment without giving her reasonable notice[1].

On 6 June 2011, the former employee’s employment was terminated after she declined a proposed variation to her employment contract. The contract that existed at the time was primarily oral, and there was no evidence that any agreement had previously been reached in relation to the notice that had to be provided by either party to terminate.

In awarding the former employee damages, Acting Justice Nicholas of the New South Wales Supreme Court had regard to the issues of reasonable notice and mitigation.

 His Honour noted that,

Absent evidence to the contrary, a term of reasonable notice is to be implied into a contract” [at 53].

Here, there was no evidence that any agreement had been reached with respect to the notice that the employer in particular had to provide to the employee in relation to termination.

The employee was awarded damages based on 10 months’ salary representing reasonable notice of termination, as well as other accumulated entitlements. In making this ruling, his Honour noted that the employee:

Conclusion

This case is a timely reminder that employers should have in place written employment contracts which include notice provisions covering the termination of employment.

While the Fair Work Act 2009 (Cth) and Modern Awards, for example, may prescribe minimum notice periods for termination, the courts may conclude that greater periods of notice apply, if notice periods have not been previously agreed. Although this case was decided in the New South Wales Supreme Court, it is likely that Queensland courts would take a similar approach to such matters.

[1] Susanna Ma v Expeditors Pty Limited [2014] NSWSC 859

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