Last August we drew attention to a number of decisions that the
minimum notice requirements under section 117 of the Fair Work
Act displaced any entitlement to reasonable
notice.1 Just a few weeks later, there was a decision to
the contrary. We have been waiting to see if there would be an
appeal from those decisions, but none yet.
It's worthwhile reviewing the decision, McGowan v Direct
Mail and Marketing Pty Ltd,2 to see how the
arguments have developed.
What was the dispute about?
Mr McGowan claimed adverse action in being dismissed. He also
claimed reasonable notice, arguing the original written contract
(which provided for limited notice) had been displaced when he was
promoted. He argued he was therefore entitled to reasonable notice.
Mr McGowan had been paid the five weeks notice under the
His employer argued that even if the old contract had been
displaced, section 117 of the Fair Work Act meant there
was no reasonable notice but just the five weeks provided by the
section. The employer also argued it was also entitled to have
dismissed Mr McGowan summarily and without any notice at all.
So the scene was set for arguments on all points.
The court's decision
First up, the company was not able to argue for summary
dismissal given it had already dismissed Mr McGowan on notice. The
law only allows an employer to argue a subsequent summary dismissal
if more information has come to hand after the termination. But
there was no new information, so the company was stuck with
dismissal on notice.
Then the court turned to consider whether the history of the
employment meant the original contract (containing express, but
minimal notice) was still in operation.
The contract had a clause that said it continued to operate
after any changes to the employment unless explicitly
replaced. At each change, the company had issued a letter saying
new conditions formed part of the original contract as an
amendment. On that basis, the court concluded the original contract
notice provisions continued to apply as they had never been
At that stage, the court could have avoided the argument about
reasonable notice but proceeded to examine the point - perhaps in
case of an appeal on other aspects of the decision.
Did the Fair Work Act displace reasonable notice?
The court closely examined previous decisions, in particular the
decision of the Full Court of the Supreme Court of South Australia
in Brennan v Kangaroo Island Council.3 You may
recall that it was the High Court's refusal to grant leave to
appeal from that decision which ignited the interest of those
seeking to argue section 117 of the Fair Work Act
displaced reasonable notice.
The Brennan case concerned particular notice provisions
in an award. The Fair Work Act had more general
application, and included the phrase "at least" (which
did not appear in the Brennan award), so the court decided
the analysis in Brennan did not follow for the Fair
Perhaps the strongest argument was that section 117 in its terms
did not convey an intention to interfere with existing legal
rights. For this reason the court concluded that the Fair Work
Act did not displace any existing entitlement to
A bit clearer – but still under a cloud
We now have a number of well-argued decisions, going both ways.
We still wait for the appeal that might return some certainty.
The lesson, as always, is to make sure employment contracts are
in writing, particularly with respect to periods of notice, so the
question of whether there is reasonable notice, and how much, need
This publication is intended as a source of
information only. No reader should act on any matter without first
obtaining professional advice.
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