Professional Beauty : Pro Beauty Nov-Dec 2015
the jurisdictional threshold of $133,000) such employees may find that contractual claims are far more lucrative if they have no written employment contract or the contract is silent on the question of how much notice of termination is required by the employer. In that situation the Courts take the view that "reasonable notice" has to be given, and what constitutes "reasonable notice" in any given situation will only be known once the Court has ruled upon it. Therefore, the absence of a written employment contract gives a disgruntled ex-employee leverage to make a significant a claim against their former employer. In the case of Susanna Ma versus Expeditors International Pty Ltd, the employee was the regional financial controller for an international logistics and shipping business. Her base salary was around $70,000 but as a result of a bonus arrangement she was earning in the range of $600k-$900k each year. At the time of her termination she had been employed by the company for 24 years. Whilst there were letters in place specifying her salary and bonus arrangements, she did not have any written employment contract dealing with what period of notice would have to be given on termination. Her employer terminated her by giving five weeks pay in lieu of notice, being the relevant period of notice under the National Employment Standards. The rate of pay for this period of notice was based upon her salary without any regard to bonuses. The employee commenced proceedings, asserting that the employer was in breach of an implied term of her employment by failing to provide reasonable notice of termination. She argued that, having regard to all the circumstances, a reasonable period of notice was 12 months. The Court reviewed the relevant case law and listed the following factors which will be generally taken into account in determining what constitutes reasonable notice: • the seniority of the position • the level of remuneration • the length of service • the professional standing of the employee • the age of the employee • the qualifications of the employee • the expected period of time it would take for the employee to find alternative employment. In this instance, the Court held that the proper period of notice was 10 months having regard to the fact that the employee: • was aged 49 and had been a loyal employee for 24 years • had held a position of significant seniority within the organisation, reporting to the managing director; • had a team of 14 people report to her; • received a significant remuneration package incorporating bonuses, which was indicative of the high degree of responsibility bestowed on the employee; • since termination she had been unemployed, despite the Court finding that she had taken reasonable measures to obtain new employment. The Court also ordered that the 10 months pay in lieu of notice be based upon the employee's average annual income of $750,000, rather than only her salary component. Lesson From This Case This case demonstrates how critical it is to have written employment contracts. If the employee in this instance had signed an employment contract specifying that she could have been terminated on five weeks' notice, then that is the period of notice which would have applied and the question of "reasonable notice" would never have arisen. It Pays To Establish The Right Procedures As a business owner you have a duty to abide by regulatory requirements in the way you appoint and employ staff. APAN places your safety in these matter as a very high priority. We offer numerous documents to help you streamline your operations and to ensure full compliance in every area of your business. All our wage queries are handled individually and we pass every enquiry through our industrial relations lawyers. We do not outsource this service, but we do double-check with our lawyers to ensure the utmost accuracy and protection for our members. For more information contact Tina Viney on 07 5593 0360. Our standard enquiry services are at no extra charge above membership. If the matter is complex or there is a dispute we will refer it to our lawyer and in such cases extra fees will apply.
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