Home' Managing Performance : Issue 1 Contents 57
The Full Federal Court found that there was a common law duty to provide
a safe and healthy workplace. There was also a contractual duty to do this,
based on the fact that Mr Nikolich had been required to sign off on the health
and safety part of the handbook and that handbook contained an express
promise that the employer would provide a safe and healthy workplace.
The handbook was found to be part of Mr Nikolich’s contract of employment
and a breach of a term of the handbook was sufficient to ground a claim of
breach of contract.
We strongly recommend that you consider all terms of your contracts of
employment and relevant policies and procedures before making a decision
to terminate an employee’s employment. This is particularly important when
considering that the VPS Code of Conduct is binding on all public sector
employees. Further, we recommend you seek advice in preparing contracts,
as the possibility of this type of claim can be minimised with careful drafting.
Breaches of implied contractual terms – “mutual trust and confidence”
Employees who believe their dismissal was unfair might claim that the
employer has breached the implied contractual duty of “mutual trust and
confidence” between employer and employee. This claim is frequently made
at the same time as a claim for breach of an express contractual term or
even alongside a claim for a statutory breach, such as a general protections
or discrimination claim.
This is originally a British doctrine, which was evolving as a doctrine in
Australia however the High Court has recently found that no implied term of
mutual trust and confidence exists in Australian contracts of employment.
For further information see “High Court finds no implicit term of mutual trust
and confidence in Australian employment contracts” www.claytonutz.com/
Workplace Relations, Employment and Safety/Publications.
Breaches of implied contractual terms – “reasonable notice”
In some cases, particularly those involving executive employees, an
employee may allege that he or she should have been paid “reasonable
notice” on termination and launch a breach of contract claim on this basis.
This type of claim may be successful if the employee’s contract contains
no notice period, or in some cases, if the employee’s job has changed
substantially since the employee originally commenced work and the
contract has become outdated (for example, where the employee has been
promoted and they have not entered into a new employment contract).
In these cases, a court may determine what constitutes “reasonable notice”
and require that the employer pay that reasonable notice. “Reasonable
notice” in some cases has been found to be up to 18 months’ pay.
Some factors that will influence the “reasonableness” of notice are:
► seniority of the employee;
► the employee’s age;
► size of the employee’s salary;
► length of service; and
► VPS standards.
Nevertheless, advice should be sought in determining “reasonable notice”.
To avoid this type of claim, we strongly recommend that you consider all
terms of your contracts of employment before making a decision to terminate
an employee’s employment. Further, we recommend you seek advice in
preparing contracts, as the possibility of this type of claim can be minimised
with careful drafting.
claims under the australian consumer law and fair
trading act 2012 (Vic)
Section 8 of the Australian Consumer Law and Fair Trading Act 2012 (Vic)
states that the Australian Consumer Law applies as a law of Victoria.
Section 18 of Schedule 2 of the Australian Consumer Law prohibits an
employer making misleading claims to a person who is seeking employment
as to the availability, nature, terms or conditions of, or any other matter
relating to, the employment. In some cases, on termination an employee
may make a claim that the termination breaches a representation made
prior to employment and therefore constitutes a breach of the Australian
Consumer Law. For example, if an employee can prove that:
► a representation was made to the employee before he or she commenced
employment that their position would never be made redundant;
► a redundancy has in fact occurred; and
► the employee relied on the representation when choosing to accept the
then a claim under section 18 of the Australian Consumer Law (Schedule 2
to the Competition and Consumer Act) might be successful.
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