Between January 2002 and March 2005, a Farm Manager was employed by a company (‘the Employer’). The Farm Manager was paid $30 per hour and received 4 weeks annual leave. The Farm Manager’s contract did not contain an express provision regarding termination of employment.
The Farm Manager’s employment was terminated in March 2005 and the Farm Manager was not paid any notice in lieu of termination. The Farm Manager argued that he was entitled to reasonable notice and that such reasonable notice was implied into his contract. The Farm Manager argued that he was entitled to 3 months’ notice while the Employer argued that he was entitled to 1 months’ notice. Agreeing with the Farm Manager, Justice Robert Beech of the Supreme Court of New South Wales held:
“[The Farm Manager] was 53 years of age at the time he was dismissed. He had worked in the position for almost three years. The position was a relatively senior one in that he was managing a substantial commercial enterprise. His position had considerable autonomy in that he was only accountable to [the Farm Owner] and, to a lesser extent, [the Chief Financial Officer]. In those circumstances I consider that the three month claim made on his behalf is established.”
The Farm Manager also argued that he had an oral contract with the Employer which included an implied term that upon termination of employment the Farm Manager would be reimbursed by the Employer for using his 2 tractors at the rate of $60 per hour. Although the Employer denied this, Justice Beech agreed with the Farm Manager stating:
“While there is room for debate about the amount of hours the tractors were used, I consider the evidence that there was a significant amount of usage of [the Farm Manager’s] tractors on [the Farm] during the years 2002 to 2005 to be overwhelming. I regard the objective likelihood that [the Farm Manager] allowed his tractors to be used on [the Farm] without some agreement that he would eventually be reimbursed to be low.”
This case highlights the importance of formalising all agreements with employees, especially senior ones, so as to avoid confusion and lengthy and expensive Court proceedings required to determine what an employer and employee had actually agreed to.
If you would like advice on formalising negotiations with employees or prospective employees, please contact Nick Stevens, Victoria Sales or Liza Isho.
Author: Nick Stevens, Principal, Stevens & Associates Lawyers, an AIIA.biz expert and one of the Panel of Expert Bloggers.
This article provides general information only. It is not legal advice, and is not a substitute for legal advice. Specific advice should be sought to take into account your particular circumstances. Stevens & Associates Lawyers is a boutique industrial relations and employment law firm. It has liability limited by a scheme approved under Professional Standards Legislation.