Reasonable notice claim costs employer

The recent case of Daigle v SCT Operations Pty Limited [2022] NSWDC 364 (Daigle) has highlighted the importance of ensuring that employees have an agreed, lawful period of notice of termination in their employment contract.

Gadens' George Haros, Siobhan Mulchay, Diana Diaz and Leo Rodrigo explain more about the case.

In Daigle, an employee was made redundant and received five weeks of notice and 12 weeks of redundancy pay in accordance with the NES after 16 years of employment.

Their contract did not contain a notice clause.

The NSW District Court held that he was instead entitled to eight months' reasonable notice as well as an amount in respect of a performance bonus.

Where there is no express notice of termination clause, courts may imply a term that provides employees with 'reasonable notice'.

Usually, this requires that a 'gap' in the employee's entitlement needs to be filled.

What constitutes a reasonable notice period depends on factors including an employee's age, length of service, salary, seniority of position, and availability of other employment.

Depending on the circumstances, reasonable notice could be significantly higher than the minimum period of notice required under the NES.

Although reasonable notice claims pose real risks in many Australian jurisdictions, there are practical steps that employers can take in order to minimise the risk of successful claims.

For more information, visit the Gadens website here: https://www.gadens.com/legal-insights/reasonable-notice-claim-costs-employer/