Logistics Company Expeditors International terminated the contract of an employee who had been with them for 24 years.
The employee was 49 years old when they were dismissed and had an accounting team of more than 12 people reporting to them.
The employee claimed Expeditors International breached the employment contract by failing to give reasonable notice before termination. They argued a reasonable notice period was 12 months at an income of $62,511 each month. Expeditors International only offered five weeks pay in lieu of notice giving her a total payout of $50,000. The employee’s gross average annual income over five years was calculated at $750,132, or $62,511 per month.
Acting Justice Nicholas found what was reasonable notice was to be determined after consideration of all the relevant circumstances of the case. Length of service and seniority were two important factors. After some consideration, the court found the proper period of notice was 10 months and that the employee was entitled to payment at their final salary rate. It also awarded the payment of a pro rata bonus of $8,138 and payment of the balance payable for long service leave in the amount of $265,373.
“The reality is that if you don’t specify your notice period in a contract you are left with reasonable notice as a matter of law,” he says. “There are key clauses in every employment contract which you must have,” he said. He also mentioned that most contracts in small business don’t include any description of the job the employee is doing.
“The problem with small business is they don’t have proper contracts so they are always chasing their tail with injured or poorly performing workers.” This is one of many reasons HR Central is such a critical tool for business.