An employee's employment is terminated by their employer.
There is a question about whether there is a written employment
contract in place.
Can the employer simply rely on the standard notice provisions
in the Fair Work Act to terminate?
Should the notice that is to be given be greater?
The issue of reasonable notice was examined recently by the
Federal Circuit Court in the matter of McGowan.
The worker commenced employment with the employer in February
1999. The original employment contract provided for a 'sliding
scale' in relation to notice of termination by either party.
Over time, the worker's positions with the employer were
changed. The worker's employment was terminated on 17 November
2014, at which time he was paid five weeks' in lieu of notice
in accordance with the minimum requirements of the Fair Work Act,
but also taking into account the four weeks' notice that was to
be provided to the worker under his employment contract.
The worker argued that the notice period contained in his
original contract of employment did not apply because of the
subsequent variations to his position, and that any termination had
to be effected by "reasonable notice" (i.e. the worker
argued that in his case this amounted to 12 months'
In the background to these facts, the worker alleged that his
employment had been terminated after he had exercised a
"workplace right" after making "complaints or
enquiries" in relation to his employment. This allegedly
occurred during discussions with an external human resources
consultant engaged by the employer, as well as during a subsequent
discussion with the consultant and one of the company's
directors around one month later. Ultimately, the worker's
employment was terminated, and the reasons cited for this
termination included a "lack of work performance in
Sales" and the worker's "HR skills" in the
way he allegedly spoke to his staff and clients. These latter
allegations involved five instances of "rude and crude"
The worker alleged that because he made these complaints or
enquiries, his employment was terminated, in breach of the general
protections provisions of the Fair Work Act.
His Honour Judge McNab found that the second meeting between the
worker, the human resources consultant and the employer's
director did constitute a "complaint or enquiry", however
concluded that this was not a factor in the termination of the
worker's employment. His Honour also had regard to, among other
matters referred to in evidence, a report written by the human
resources consultant at around the time of her first meeting with
the worker which was highly critical of the worker's management
It was also found by his Honour that the employment contract
which was entered into between the worker and the employer in 1999
continued to govern the terms of the employment as at the date of
termination. On that basis, his Honour found that there was no
basis for implying a term of reasonable notice.
An argument was also raised by the employer that the notice of
termination provisions of the Fair Work Act prevented the
implication of a term of reasonable notice in any event.
While his Honour considered that there remained "genuine
controversy" as to whether this provision of the Fair Work Act
operated so as to displace the implication of a term of reasonable
notice (particularly in the absence of an employee being employed
under an award prescribing a period of notice), he considered that
the provision was intended to provide a minimum period only.
In the decision referred to above, reasonable notice did not
need to be implied into the worker's contract because it was
determined that a written contract set out the notice required on
termination (even though the employer provided a further week to
ensure compliance with the Fair Work Act).
Had circumstances arisen where the employer could not point to
agreed terms of the employment setting out notice, matters could
have been very different.
It is not unknown for courts to award damages representing the
equivalent of earnings representing 12 months' notice,
particularly in situations involving senior employees with a
considerable longevity of service.
What this case does demonstrate importantly, is that the notice
provisions in the Fair Work Act can probably be regarded merely as
setting out a minimum entitlement which is to be provided, and not
the actual entitlement which may need to be provided to an
The case also reinforces the importance of having written
employment contracts in place for employees.
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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