Being dismissed from an executive role can be a challenging and emotional experience. For executives in Australia, understanding the legal framework and options available is crucial to navigating this difficult time effectively. This guide provides a detailed overview of the legal recourse options, key considerations, and practical steps executives can take when facing termination.
Whether you are preparing for potential dismissal or have already been terminated, this article, prepared by our employment lawyers, will help you understand your rights under Australian law and how to protect your interests.
Key Takeaways
- The Fair Work Act 2009 (Cth) provides unfair dismissal protections, but high-income earners may not qualify.
- Restraint of trade clauses, bonus entitlements, and notice clauses in employment contracts are critical to review.
- Executives can pursue claims for unfair dismissal, general protections, or breach of contract.
- Internal grievance processes and out-of-court settlements are often viable alternatives to litigation.
- Procedural fairness and compliance with employment laws are essential for employers to avoid legal risks.
Understanding the Legal Framework for Executive Dismissals in Australia
Fair Work Act 2009 (Cth)
The Fair Work Act 2009 (Cth) is the cornerstone of employment law in Australia. It provides protections against unfair dismissal if the termination is deemed harsh, unjust, or unreasonable. However, executives classified as high-income earners (earning above the high-income threshold) are excluded from these protections.
Executives who are eligible must lodge an unfair dismissal claim with the Fair Work Commission within 21 days of dismissal.
Public Service Act 1999
For executives in the Australian Public Service (APS), the Public Service Act 1999 governs performance management and dismissal processes. Agencies must adhere to strict procedural fairness requirements when managing underperformance or terminating employment.
Legal Recourse Options for Dismissed Executives
1. Unfair Dismissal Claims
Executives who meet the eligibility criteria under the Fair Work Act can file an unfair dismissal application with the Fair Work Commission. This process examines whether the dismissal was procedurally fair and reasonable.
2. General Protections Claims
The Fair Work Act also provides for general protections claims, which address dismissals based on prohibited reasons such as discrimination, retaliation for exercising workplace rights, or other unlawful grounds. These claims must be lodged within 21 days of dismissal.
3. Breach of Contract Claims
High-income earners who are excluded from unfair dismissal protections can pursue claims for breach of their employment contract. Key clauses to review include:
- Restraint of trade and non-solicitation clauses: These restrict post-employment activities but are often difficult to enforce unless reasonable.
- Bonus entitlements and severance clauses: Ensure all payments owed under the contract are honoured.
- Notice clauses: Employers must comply with notice periods specified in the contract, or they risk breaching the agreement.
4. Judicial Review
Executives can seek a judicial review in higher courts, such as the Federal Court, if their dismissal violates administrative law principles or procedural fairness requirements.
5. Anti-Discrimination Claims
If the dismissal involves discrimination based on sex, race, age, disability, or other protected attributes, executives can lodge complaints with bodies like the Australian Human Rights Commission under laws such as the Sex Discrimination Act 1984 (Cth).
6. Internal Appeals and Grievance Processes
Many organisations offer internal appeal mechanisms to resolve disputes before escalating to external legal action. Engaging in these processes can often lead to quicker and less costly resolutions.
Essential Steps for Australian Executives After Dismissal
1. Document Everything
Keep detailed records of meetings, emails, and any communications that may serve as evidence of unfair treatment or procedural breaches. Contemporaneous notes are particularly valuable in disputes.
2. Review Your Employment Contract
Carefully examine your employment agreement for clauses related to termination, bonuses, restraints, and notice periods. Seek legal advice if any terms are unclear or appear to have been breached.
3. Avoid Signing Anything Immediately
Do not sign any documents or provide written comments (such as a deed of release or settlement) without consulting an employment lawyer. This ensures you do not inadvertently waive your rights or weaken your legal position.
4. Explore Settlement Options
Out–of–court settlements can often provide a quicker and less stressful resolution than litigation. Employers may also prefer to keep disputes confidential.
5. Seek Legal Advice
Consulting an experienced employment lawyer is essential to understanding your rights and options. They can help you assess the strength of your case and negotiate favourable outcomes.
Additional Considerations for Executive Employment Contracts
Restraint of Trade Clauses
Restraint of trade clauses are notoriously difficult to enforce but can still pose challenges for executives. If you need to act contrary to such a clause, consult an employment lawyer to assess its enforceability and minimise risks.
Bonus Entitlements and Severance Clauses
Check your employment contract for triggers related to bonuses, deferred payments, or severance clauses. These payments can significantly impact your final payout and serve as leverage during negotiations.
Non-Solicitation Clauses
Be cautious about contacting former clients or employees if your contract includes non–solicitation clauses. Breaching these clauses can lead to legal disputes with your former employer.
Notice Clauses
Ensure your employer complies with the notice period specified in your contract. Failure to do so may constitute a breach of contract, providing you with a strong bargaining position. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.
Frequently Asked Questions (FAQs)
What is the high-income threshold under the Fair Work Act?
The high–income threshold is updated annually and excludes employees earning above this amount from unfair dismissal protections under the FWA. As of July 2024, it is $167,500 per annum (subject to change).
Are restraint of trade clauses enforceable in Australia?
Restraint of trade clauses are enforceable only if they are reasonable in scope, duration, and geographic area. Courts often strike down overly restrictive clauses.
How long do I have to lodge an unfair dismissal claim?
You must lodge an unfair dismissal claim with the Fair Work Commission within 21 days of your dismissal. Extensions may be granted in exceptional circumstances.
Can I claim compensation for discrimination during my dismissal?
Yes, you can lodge a complaint with the Australian Human Rights Commission or relevant state/territory anti–discrimination body to seek compensation for unlawful discrimination.
What should I do if my employer breaches my notice period?
If your employer fails to comply with the notice period specified in your contract, you may have grounds to claim damages for breach of contract. Seek legal advice to explore your options.
Need help with your executive dismissal? Contact our experienced employment lawyers today for a confidential consultation.
