What is reasonable notice when a contract of employment is terminated?

by The FindLaw Team

Contracts of employment come to an end on a regular basis either at the direction of the employee or employer. When the contract of employment does come to an end, notice requirements still need to be fulfilled, and it must be reasonable notice. 

Before exploring what constitutes reasonable notice, we should quickly look at the general principles relating to notice. First, if there is no fixed term of when the contract is to end, the contract can be lawfully terminated once notice is provided – which can be expressed or implied.

What is reasonable notice?

When determining whether notice is reasonable is a question of fact, as was stated in Rogan-Gardiner v Woolworths Ltd [2012] WASCA: “The length of the required notice in any case is a question of fact to be decided in the light of the objective circumstances as they exist at the time the notice is, or should have been, given.”

The main purpose of notice when terminating a contract of employment, is to allow the employer and employee to make the necessary adjustments when the contract has come to an end, as noted by the Western Australian Supreme Court of Appeal in Rogan-Gardiner:

“The object of a term requiring the giving of reasonable notice to terminate a contract at will was described by the Privy Council in Australian Blue Metal Ltd v Hughes [1963] AC 74, in the context of a commercial agreement, as follows:

The implication of reasonable notice is intended to serve only the common purpose of the parties. Whether there need be any notice at all, and, if so, the common purpose for which it is required, are matters to be determined as at the date of the contract; the reasonable time for the fulfilment of the purpose is a matter to be determined as at the date of the notice. The common purpose is frequently derived from the desire that both parties may be expected to have to cushion themselves against sudden change, giving themselves time to make alternative arrangements of a sort similar to those which are being terminated.”

The notice requirements allows an employee the opportunity to obtain a new job that is similar in nature, as Gray J said in Birrell v Australian National Airlines Commission [1984] FCA 378; (1984) 5 FCR 447):

“The purpose of providing in a contract for a period of notice of termination is to enable the party receiving the notice to make other arrangements. An employee given notice by his or her employer has a period of time in which to seek another job; an employer who receives notice has time to arrange for a substitute employee. It would be harsh if arrangements so made during the running of the notice could be disrupted, and parties could be held to their contracts by unilateral withdrawal of the notice at the last minute. Such withdrawal, if possible, could lead to an employee being bound by contracts of employment to employers, or an employer being bound by contracts of employment with two employees, each being required to give notice to one or the other in order to be extricated from this position, or possibly to suffer the requirement to forfeit or pay wages for a period of time. In my view, I should lean against the adoption of any principle which could lead to such unfortunate consequences, and I should follow the authorities which tend to establish that withdrawal of a notice of termination of a contract of employment can only be effected by consent of both parties.”
 

What are some of the factors used when determining reasonable notice?

Some of the factors used in assessing whether notice was reasonable can include (per Rogan-Gardiner citing The Law of Employment):
 
  • the age, qualifications and experience of the employee;
  • the importance of the position;
  • the size of the salary;
  • the nature of the employment;
  • the length of service by the employee;
  • the professional standing of the employee;
  • how long it may take the employee to find new employment;
  • apart from dismissal, the period of time the employee would have continued in the job.

However, it’s generally stated in case law that reasonable notice boils down to the facts of each individual case, rather than hard and fast rules laying out the requirements of reasonable notice. 

 


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