It appears that Mark McInnes has done what most CEOs do when
faced with a dispute with the Board, negotiate a settlement of his
contractual rights. Perhaps one of the factors motivating David
Jones in such a negotiation was one of the new back door unfair
dismissal actions by CEO's and senior executives.
Previously only employees earning less than $108,000 could
launch unfair dismissal claims. CEOs and senior executives had to
commence expensive and lengthy breach of contract cases if they
were dismissed. If their employment was being threatened and they
had short notice periods they had really nowhere to go. Incentives
that form a big part of packages can easily be contractually
unattainable if an employer wants to play hard ball.
Now, thanks to the new definitions of "adverse
actions" in the Fair Work Act, all employees under
the national employment system - regardless of income - can seek
remedies in relation to their dismissal if they can establish their
dismissal related to their "workplace rights".
Workplace rights are defined very widely in the new legislation
and damages which can be awarded in unfair dismissal actions
related to workplace rights are not limited to 26 weeks. This opens
the door for senior executives to seek potentially unlimited
damages. A "workplace right" could be a claim by a person
that they are complaining about bullying or safety issues and are
then dismissed for other reasons.
Examples so far of this new type of action are a CEO alleging
that she was going to be terminated because of her involvement with
union negotiations. She successfully obtained an injunction
stopping her employer from sacking her for six months while the
full case was heard. The injunction was granted in November 2009
and prevented any termination of her employment until the Federal
Court decision on 29 April 2010. The Federal Court eventually held
that her employer acted fairly – but the case illustrates
that CEOs or senior employees faced with dismissal may be able to
delay any termination of employment if they can claim some breach
of "workplace rights".
The two decided cases were unsuccessful for the employees for
their own particular reasons. However the Judges' findings make
it clear that as long as a CEO or senior executive can prove a loss
suffered, and overcome the hurdles of the legislation, substantial
damages can – and probably will - be recovered. There are
many more cases in the pipeline.
Mr McInnes chose the route of a quick negotiated settlement.
There are many other examples of CEOs who if they had the right
avenue to pursue their employers would do so to ensure they can
recover damages if they are being forced by their management to
either ignore safety/discrimination issues in the work place. They
can use this avenue to recover not just what they may have got
under contract, but some of the more elusive benefits of long term
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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