The Supreme Court recently held that 10 months salary
constituted reasonable notice for a Financial Controller following
her termination at the instigation of her former employer. By way
of background, the employee received a letter of appointment in
1987 when she started with the company (so she had been employed
for more than 24 years when she was terminated), she was 49 years
of age and she was on a salary package of more than $700,000 per
annum. See Susanna Ma v Expeditors International Pty Ltd;
Susanna Ma v Expeditors Pty Limited  NSWSC 859 (30 June
2014) for more details.
If you have a senior employee who does not have an employment
contract, or their employment contract is out of date, that is, it
doesn't specifically relate to the role they currently occupy
– you run the risk of that employee being able to make a
reasonable notice claim in circumstances where you decide to
terminate their employment for any reason other than serious
What is "reasonable" will ultimately be determined by
a court but the factors a court will ordinarily take into
the likely difficultly of the employee finding replacement work
on the same or similar salary,
the employee's age,
the seniority of the employee's position, and
the duration the employee has been employed.
The older the employee, the longer they have been employed, and
the less likely are to find similar replacement work – the
better positioned they are to be able to assert an entitlement to
more notice. As a starting point, notice rarely exceeds 12 months
pay, so the judgement to be made in such circumstances is where the
employee fits on a scale of 1 month to 12 months having regard to
all relevant circumstances.
Note: where a senior employee has an up-to-date employment
contract – the amount of notice to be given or paid is as per
the express term of the employment contract.
The content of this article is intended to provide a general
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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