A recent High Court decision has reinforced:
- that not all employment laws apply to employees equally; and
- the importance of having a well worded contract of employment.
Australia’s statutory unfair dismissal laws only cover those people earning under the high income threshold (currently $133,000 pa) or whose jobs are covered by industrial awards or enterprise agreements. That leaves a large group (particularly managers and professionals) who have no protection against “unfair” dismissal. Laws about discrimination, general protections and unlawful dismissal, whilst applying to all, are of narrow application.
There have been several court decisions in recent years about whether a general obligation of trust and confidence is implied into the common law employment relationship in Australia, which might amount to a de-facto common law unfair dismissal jurisdiction. However, in Barker, the High Court ruled that only terms that are “necessary” will be implied into the common law contract of employment. The High Court held that, without a specific contractual obligation, there is no general implied obligation on employers to attempt to redeploy employees before terminating employment, even where the employer has a redundancy policy requiring it.
This situation would most likely be unfair if the employee had access to the statutory unfair dismissal jurisdiction. However, if the employee does not have that access, there may be no consequences for the employer (apart from statutory and contractual redundancy pay requirements). So, it is worthwhile remembering that not all laws apply to employees equally and not to underestimate the value of a well worded contract of employment which clearly states the employer’s common law obligations.