What is reasonable notice? Employer pays $176,250 for typo

The decision in Lord v Toll Transport Pty Ltd [2026] FedCFamC2G 348 acts as an important reminder in relation to the care and attention needed to ensure employment terms are accurately documented.

If not, it can cost you.

What was it about?

Rodney Lord was a 59 year old man who had been employed by the Toll Group and its subsidiaries for approximately 34 years at the time of his dismissal, holding various senior management roles, culminating in his appointment as General Manager – Queensland from 12 July 2018 until his termination.

Mr Lord’s responsibilities included managing Toll’s Queensland business, which encompassed all road and rail freight terminals within the state. His annual salary at the time of termination was approximately $235,000, and he had received bonuses for his contributions to business improvements. 

On 9 March 2021, a meeting was held in relation to Mr Lord’s employment, during which he was handed a termination letter providing him three months’ notice of termination. The reason for his dismissal was said to be that “the business was heading in a new direction and needed new leadership”.

The end of the notice period was 9 June 2021, at which time Mr Lord’s employment ended. 

Mr Lord alleged a reason for his dismissal was unlawful due to bullying complaints he had made in the past. Mr Lord alleged Toll’s actions in dismissing him from employment constituted unlawful adverse action pursuant to section 340 of the Fair Work Act 2009 (FW Act). Mr Lord personally named individual executives who he said were also liable under the FW Act.

Further, Mr Lord claimed that he should have been given more notice of termination than 3 months.

Was he entitled to more notice of termination?

Notice of termination is governed by various instruments – the employment agreement, an applicable award or enterprise agreement, the FW Act – and, in dismissing an employee, an employer must ensure it is providing the higher amount of notice to the employee under any applicable instrument.

In Mr Lord’s case, he was entitled to receive 5 weeks’ notice pursuant to section 117 of the FW Act as he was an employee with more than 5 years’ service and was over 45 years old. He was given 3 months’ notice, so the FW Act was satisfied.

However, it does not stop there. Toll also had to ensure that it was satisfying Mr Lord’s employment agreement.

In this regard, Mr Lord’s most recent role was governed by a written employment agreement, which provided a notice of termination provision as follows (our emphasis):

(a) Either you or Toll may terminate your employment at any time by giving months’ written notice.

What does that mean?

While not canvassed in the decision, it appears that someone had made an unfortunate mistake and had forgotten to insert how many months’ notice was required to terminate the employment.

The Court said:

In circumstances where no written notice period was specified in the employment contract governing Lord’s termination, the Court will imply a term into the contract that a reasonable notice period was required to be given. 

The process of implying terms into employment agreements depends on the terms of the agreement and the circumstances that exist at the time notice is given.

In relation to implying a term for notice specifically, it is accepted at law that what is a “reasonable” length of time is a question of fact to be answered in the circumstances of each matter, including:

• What will allow both parties to adjust to the new circumstances when the contract is terminated, to wind up the relationship in an orderly fashion;

• What will cushion the employee against sudden loss of employment and allow them to find new employment (which may be considered to be between 6 to 12 months for senior managers); and

• What will enable the employer to hire a replacement.

Applying these principles, the Court found that Mr Lord should have been given 12 months’ notice, supported by the circumstances of the matter, including:

• The length and loyalty of Mr Lord’s employment, including his tenure of 34 years with no conduct concerns and his status and reputation within the company, with the Court describing him as a “veteran in the Toll Group companies”;

• The historical knowledge of the business and value provided to the business;

• The fact that Mr Lord’s prospects of transitioning to a position of equal pay and seniority were limited; and

• Interestingly, the Court stated: “the notion of respect ought also to have been one of the factors to be considered when fixing the termination notice period in respect of Lord’s employment”.

Mr Lord was therefore successful in demonstrating that Toll had breached an implied term in his employment agreement by only giving him 3 months’ notice of termination, and the company was ordered to pay $176,250 plus interest (being an additional 9 months’ notice to that which he had already received).

Adverse action claim dismissed

With respect to the unlawful adverse action claim, Toll was successful in discharging the reverse onus in section 361 of the FW Act and Mr Lord’s claim pursuant to section 340 of the FW Act was not successful.

Key lessons for employers

The Court’s findings on reasonable notice provide an important lesson for employers.

That is, in the absence of a written notice period, whether due to no written contract or no written contract specifying the precise period (as was the case for Mr Lord), what is found to be a reasonable period of notice may represent significant liability for an employer.

This decision acts as a reminder for employers to ensure employment agreements are in writing, clear, fulsome and up to date. It may be that a process of review and identification of inadequate terms should be undertaken.

If concerns arise, and provided the parties genuinely agree, it is open to an employer and employee to sign updated employment written terms (with adequate consideration).

We’re here to help employers act now to avoid future liabilities.

Authors: Andrew Yahl & Hannah Lawson

This publication is intended as a source of information only. No reader should act on any matter without first obtaining professional advice.