Case study · Contract disputes

Accused of misconduct after 19 years, she won nine months' notice

Nine months' notice, less five weeks paidFederal Circuit Court of Australia · 25 June 2021
A woman sits alone at a bare open-plan desk with a box at her feet while managers meet behind a glass wall.

Janelle McAlister helped set up the Australian arm of a Norwegian fertiliser group in 1996 and worked for Yara Australia for almost 19 years, rising to administration, logistics and human resources manager. In April 2015 a new managing director restructured the business. Ms McAlister learned at a meeting that her role had changed; most of her duties were taken away, and she was left with 'an empty title'.

In October 2015 Yara decided to stop using a customs broker whose owner was married to a Yara employee, a relationship long known in the company. The broker asked whether Yara was ending a contract running to November 2015, which Ms McAlister had signed in February. She had also signed a routine shipping authority for the broker's new owner. On 16 October 2015 Yara summarily dismissed her for serious misconduct, paying five weeks in lieu of notice.

The court found she had authority to sign both documents and had spoken to the former managing director about the contract. The contract caused Yara no loss, and the authority saved it detention charges. Matters Yara relied on were never put to her, and the disciplinary interview was a formality. Her minor slips did not warrant summary dismissal.

Her 1996 contract said nothing about notice, so the court implied a term of reasonable notice, and held that the minimum in the National Employment Standards did not displace it. She was 54, had served 19 years, had narrow experience and no formal qualifications, and had struggled for years to find comparable work. The court fixed nine months, valued on her $191,200 package, less the five weeks paid. Her claims for redundancy pay, and that she was dismissed because of her age, back surgery or complaints, failed.

What it means for you

If your contract sets no notice period, you may be entitled to reasonable notice, which for long-serving or older staff can be many months rather than the statutory minimum. An employer that dismisses for serious misconduct must be able to prove it.

Courts have differed on whether the minimum notice in s 117 of the Fair Work Act displaces the common law right to reasonable notice. This judgment held that it does not.

A published decision of the Federal Circuit Court of Australia, retold in plain English. Lawcaptain did not act in this case. Every outcome depends on its own facts. General information, not legal advice about your situation.

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