The $1m employee termination blunder

Length of service and seniority were two important factors in a recent NSW Supreme Court decision, which compelled an employer to part with $900,000.

The $1m employee termination blunder
Length of service and seniority were two important factors in a recent NSW Supreme Court decision, which awarded an employee 10 months’ termination notice.
                    
Global logistics company Expeditors International terminated Susanna Ma's employment and offered just five weeks notice, valued at around $50,000, after she objected to variations to the terms of her employment, including a 50 per cent reduction of her substantial monthly bonus.
 
Upon her dismissal, Ma – a regional financial controller who had worked for the company for over 24 years – demanded 12 months notice and requested that her long service leave payout be calculated not on her base salary of $70,000 per annum, but on her total salary (including incentives and bonuses) of $750,000 annually.
 
In Susanna Ma v Expeditors International Pty Ltd [2014] NSWSC 859 (30 June 2014), the New South Wales Supreme Court found that the reasonable notice period to terminate the employment of a long-serving senior employee was 10 months.
 
The Supreme Court also agreed that her long service leave should be calculated on the higher figure.
 
She was therefore awarded the payment of a pro rata bonus (for four days) worth $8,138; plus the balance payable for long service leave in the amount of $265,373; and over $625,000 to cover 10 months’ notice.
 
In another recent decision, District Council of Barunga West v Hand [2014] SASCFC 90 (6 August 2014), an executive employee succeeded in establishing a claim for 12 months' reasonable notice.
  
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