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As an executive, can I rely on the notion of reasonable notice?

The Fair Work Act 2009 (Cth) (FWA) provides a statutory requirement for employers to provide their employees with a minimum period of notice, in accordance with the number of years the employee has been employed for. The legislation applies equally across all employees and does not distinguish according to seniority.

However, it is not uncommon for employment contracts to provide an amount of notice greater than required under the FWA, particularly for senior executive employees.

But what about if you find yourself in a position where your contract does not contain a period of notice, or your contract might be outdated and apply to a less junior position that you held in previous times? How much notice should you be paid should the worst case scenario come to actualisation and you are dismissed from your employment?

What is reasonable notice?

The general position is that where a contract does not provide an express period of notice, or where this may be deemed to be inadequate, the law may imply a period of notice that is “reasonable.”

In considering what is reasonable, a Court will look at a number of factors, including the seniority of the position of the employee, their length of service, the employee’s age, their ability to find other employment, and whether they were induced to take up employment with the employer.

This may be relevant in circumstances where you have worked your way up through the company and are now in a in a senior position, however your contract might not have been updated in writing at the time you were appointed to a higher role. The period of notice in the contract may therefore no longer be appropriate given your current position of seniority.

It may be possible in these circumstances, for an employee to argue that they should receive reasonable notice in the event of their termination. This amount of notice may be an amount much higher than what is contained in the legislation, and could be for a matter of months.

If you believe you may fall into this category, it is important to get early advice. In recent times, there have been a few decisions where various courts have held that the statutory minimum was applicable rather than the longer period of reasonable notice.

Written by Shine Lawyers. Last modified: December 4, 2018.

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