This decision of the Federal Circuit and Family Court of Australia contains an excellent summary of the common law principles at play when interpreting employment contracts, in this case to determine the reasonable period of notice of termination.
“Introduction
The trial of this proceeding took place over 3 days, being 8 and 9 September 2025 and 19 November 2025. At the time of trial, the applicant (Lord) was a 63 – year-old male born on 22 February 1962 who lived in Toowoomba with his partner.
The applicant relevantly commenced employment with the first respondent (Toll) pursuant to a written employment contract dated 6 July 2018 (the Employment Contract). The contract was executed by Lord on 12 July 2018, commenced on that date, and was comprised of a Letter of Offer and Annexure A – General Terms and Conditions. [1] His position was that of General Manager – Queensland.
On 9 March 2021, a Termination Meeting was held at Toll’s office in Brisbane between Lord, the Third Respondent (Rugendyke) and the Fourth Respondent (de Lange Savage). Lord was handed a Termination Letter at such meeting [2] which was signed by Rugendyke, in his capacity as Executive General Manager of Toll Palletised Express, on behalf of Toll. The Termination Letter provided that Lord’s employment was being terminated upon the giving of 3 months’ notice.
At the Termination Meeting, Rugendyke also offered to Lord what was termed an ex-gratia payment in the amount of $58,750.00, such payment being conditional upon Lord’s execution of a Deed of Release which would have precluded him from instituting the subject proceedings. Lord declined to accept the ex-gratia payment, and he did not execute any Deed of Release. So much is not in dispute.
Lord’s last day of employment was 9 June 2021. At that time, de Lange Savage sent a letter to Lord’s solicitor advising him that Toll would shortly make a final payment to Lord which was to include the monetary value of any accrued but untaken leave entitlements, and any final salary payment. Those payments were duly made and were not the subject of claims by Lord in this proceeding. [3]
Lord pleaded that during the course of the Termination Meeting, Rugendyke told him that the reason for his termination was because Toll “ … was heading in a new direction under new leadership.” That is consistent with what Rugendyke deposed at [117] of the Rugendyke affidavit filed on 9 May 2025. At [118] of his affidavit, Rugendyke deposed as follows:
[118] I had decided before the meeting that I would not raise any specific concerns regarding the applicant’s performance during the meeting, because I did not believe I was required to do so, and I also did not want to make the meeting any more difficult for the applicant than it was already going to be.
Prior to the termination of his employment on 9 March 2021, Lord had been employed by one or other of the subsidiaries of the Toll Group of companies over a period of approximately 34 years, during which time he occupied senior management positions. Lord was based in Toowoomba and travelled to other parts of Queensland as and when required. As at the date of termination of his employment, Lord’s annual salary was in the order of $235,000.00.
Lord’s relevant history of employment within the Toll Group was as follows:
(a) 1988 the Toowoomba Operations Supervisor;
(b) 1989 the Toowoomba Operations Manager;
(c) 1993 the Toowoomba Branch Manager;
(d) 2001 the South East Queensland Regional Manager;
(e) 2013 the South East and Central Queensland Regional Manager;
(f) from 12 July 2018 until 9 June 2021 the General Manager Queensland.
Lord was responsible for Toll’s business in Queensland, which included the management of all road and rail freight terminals. The terminals controlled the movement of freight through the toll network from a sender to a receiver. Queensland was Toll’s largest State in terms of number of depots, deliveries and employees. [4]
One of the key performance indicators within the Toll business was “Delivered In Full On Time” – DIFOT. Queensland had the largest number of branches and employees the subject of DIFOT criteria.
At [6] – [60] of the Lord affidavit filed on 11 April 2025 (the Lord affidavit), Lord deposed how he had progressed through the ranks to become General Manager – Queensland. He described how he had made improvements to the business model and how he had been awarded bonuses for his efforts.
At [61] – [199] of the Lord affidavit, Lord deposed how he had been bullied by one Talevski, who was the EGM of Toll Palletised Express, from about August / September 2018 until the termination of Talevski’s employment in about November 2020. Lord had complained to Beacham and others about bullying by Talevski over a number of years. [5]
Lord alleged that his employment was terminated by Toll because he made the pleaded complaints of bullying by Talevski, and that such termination constituted adverse action contrary to the provisions of s. 340 of the Fair Work Act 2009 (Cth) (the FWA). Lord further alleged that each of Beacham, Rugendyke and de Lange Savage were relevantly involved in such termination and that they were therefore each accessorily liable to Lord.
The respondents alleged that Lord’s employment was terminated because the business was heading in a new direction and needed new leadership. That allegation was made in the context of there being evidence that for the financial year ended 31 March 2020, the Toll Group of companies had suffered a loss of $685.3 million, [6] and that thereafter, losses were ongoing.
A resolution by the Court of the question as to why Lord was terminated rested upon whether or not the Court accepted Rugendyke’s evidence that the reason for such termination was that Toll was heading in a new direction under new leadership.
The Law
The provisions of ss. 340, 341 and 361 of the Fair Work Act (2009) (Cth) (FWA) are respectively as follows:
Section 340 – Protection
(1) A person must not take adverse action against another person:
(a) because the other person:
(i) has a workplace right; or
(ii) has, or has not, exercised a workplace right; or
(iii) proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or
(b) to prevent the exercise of a workplace right by the other person.
Note: This subsection is a civil remedy provision (see Part 4-1).
(2) A person must not take adverse action against another person (the second person) because a Sixth person has exercised, or proposes or has at any time proposed to exercise, a workplace right for the second person’s benefit, or for the benefit of a class of persons to which the second person belongs.
Note: This subsection is a civil remedy provision (see Part 4-1).
…
Section 341 – Meaning of workplace right
(1) A person has a workplace right if the person:
(a) is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or
(b) is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or
(c) is able to make a complaint or inquiry:
(i) to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or
(ii) if the person is an employee – in relation to his or his employment.
Meaning of process or proceedings under a workplace law or workplace instrument
(2) Each of the following is a process or proceedings under a workplace law or workplace instrument:
(a) a conference conducted or hearing held by the FWC;
(b) court proceedings under a workplace law or workplace instrument;
(c) protected industrial action;
(d) a protected action ballot;
(e) making, varying or terminating an enterprise agreement;
(f) appointing, or terminating the appointment of, a bargaining representative;
(g) making or terminating an individual flexibility arrangement under a modern award or enterprise agreement;
(h) agreeing to cash out paid annual leave or paid personal/carer’s leave;
(i) making a request under Division 4 of Part 2-2 (which deals with requests for flexible working arrangements);
(j) dispute settlement for which provision is made by, or under, a workplace law or workplace instrument;
(k) any other process or proceedings under a workplace law or workplace instrument.
Prospective employees taken to have workplace rights
(3) A prospective employee is taken to have the workplace rights he or he would have if he or he were employed in the prospective employment by the prospective employer.
Note: Among other things, the effect of this subsection would be to prevent a prospective employer making an offer of employment conditional on entering an individual flexibility arrangement.
Exceptions relating to prospective employees
(4) Despite subsection (3), a prospective employer does not contravene subsection 340(1) if the prospective employer makes an offer of employment conditional on the prospective employee accepting a guarantee of annual earning.
(5) Despite paragraph (1)(a), a prospective employer does not contravene subsection 340(1) if the prospective employer refuses to employ a prospective employee because the prospective employee would be entitled to the benefit of Part 2-8 or 6-3A (which deal with transfer of business).
…
Section 361 – Reason for action to be presumed unless proved otherwise
(1) If:
(a) in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
(b) taking that action for that reason or with that intent would constitute a contravention of this Part;
it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.
(2) Subsection (1) does not apply in relation to orders for an interim injunction.
For Lord’s adverse action claims to be proven, he must have asserted, and established, that:
he exercised a workplace right or rights as pleaded in his Sixth Amended Statement of Claim;
the conduct complained of in fact occurred; and
the conduct constituted adverse action pursuant to the provisions of s. 342(1) of the FWA.
If it was established by Lord that the impugned conduct was conduct which contravened provisions of the FWA, it was for the respondents to prove, on the balance of probabilities, that they were not motivated by an impermissible reason in respect of the termination of his employment.
As to the proper approach to be adopted by a Court when considering whether impermissible adverse action had been established or not, the Court respectfully adopts the principles as set out in the decision of the High Court in Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; (2012) 248 CLR 500 at [5] per French CJ and Crennan J; at [104] and [129] per Gummow and Hayne JJ; and at [140] and [141] per Heydon J where it was respectively said:
[5] The task of a court in a proceeding alleging a contravention of s 346 is to determine, on the balance of probabilities, why the employer took adverse action against the employee, and to ask whether it was for a prohibited reason or reasons which included a prohibited reason. This appeal was concerned with identifying the correct approach to that task. – at [5] per French CJ and Crennan J
[104] In light of the legislative history of s 346 and the intention of Parliament outlined above, the reasoning of Mason J in Bowling is to be applied to s 346. An employer contravenes s 346 if it can be said that engagement by the employee in an industrial activity comprised “a substantial and operative” reason, or reasons including the reason, for the employer’s action and that this action constitutes an “adverse action” within the meaning of s 342. – at [104] per Gummow and Hayne JJ
[129] The test is whether adverse action has been taken because of a proscribed reason. – at [129] per Gummow and Hayne JJ;
[140] Examining whether a particular reason was an operative or immediate reason for an action calls for an inquiry into the mental processes of the person responsible for that action. – at [140] per Heydon J;
[141] The assessment of a witness’s mental processes is an assessment of that witness’s state of mind. It is pre-eminently a matter in which a trial judge has a considerable advantage over an appellant court… – at [141] per Heydon J.
A causal link must be established between the adverse action the subject of complaint, and the matters referred to in s. 340(1)(a)(i) – (iii) inclusive of the FWA, due to the use of the word “because” in s. 340(1)(a) of the FWA. That issue was dealt with by Foster J in Russel v Institution of Engineers Australia T/A Engineers Australia [2013] FCA 1250 at [60] and [63] where His Honour said:
[60] The provisions particularly relied upon by the applicant (ss 44, 97, 340, 341, 351 and 352 of the FWA) all use the expression “because” or “because of” as describing the necessary causal link between the adverse action and the relevant prohibited reason for that action.
…
[63] It is not necessary for an applicant to establish that the only reason or the dominant reason that adverse action was taken was a prohibited reason. It is sufficient if the prohibited reason is one of several reasons for the taking of the action although it may be that the prohibited reason must have operated as a substantial and operative factor in the taking of the adverse action.
On the issue of what evidence was needed to be canvassed in relation to the impugned action taken by an employer, it was said by French CJ and Crennan J in Barclay at [41], [44] and [45] as follows:
[41] The question of why an employer took adverse action against an employee is a question of fact arising from the operation of interdependent provisions of the Fair Work Act. These provisions must be construed together in accordance with the principles of statutory construction established by this Court, which must begin with a consideration of the text of the relevant provisions and may require consideration of the context including the general purpose and policy of the provisions.
…
[44] Thise is no warrant to be derived from the text of the relevant provisions of the Fair Work Act for treating the statutory expression “because” in s 346, or the statutory presumption in s 361, as requiring only an objective inquiry into a defendant employer’s reason, including any unconscious reason, for taking adverse action. The imposition of the statutory presumption in s 361, and the correlative onus on employers, naturally and ordinarily mean that direct evidence of a decision-maker as to state of mind, intent or purpose will bear upon the question of why adverse action was taken, although the central question remains “why was the adverse action taken?”
[45] This question is one of fact, which must be answered in the light of all the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer. Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker’s evidence. However, direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon an employer even though an employee may be an officer or member of an industrial association and engage in industrial activity.
(Footnotes omitted) (Emphasis added)
On the question of onus, it was said by French CJ and Crennan J in Barclay at [50] as follows:
[50] The following description of a legislative predecessor to s 361 given by Mason J in General Motors-Holden’s Pty Ltd v Bowling remains pertinent: “the plain purpose of the provision [is to throw] on to the defendant the onus of proving that which lies peculiarly within his own knowledge.
(Footnotes omitted)
An employer’s onus may not be satisfied by a mere statement that the action taken by the employer was not for a proscribed reason. As was said by French CJ and Crennan J at [54] of Barclay:
[54] … a question arose as to whether the director’s evidence was sufficient to satisfy the onus cast upon the employer. In deciding that the director’s evidence was sufficient, the majority in Pearce recognised that mere declarations of an innocent reason or intent in taking adverse action may not satisfy the onus on an employer if contrary inferences are available on the facts.
(Emphasis added)
When deciding, for the purposes of s. 361 of the FWA, who the relevant decision-maker was, or upon whose advice or recommendation the decision-maker relevantly acted upon when taking any adverse action, White J in Tsilibanks v Transfield Services (Australia) Pty Ltd [2015] FCA 740 at [121] – [127] inclusive said:
[121] My conclusion that the applicant’s exercise of his workplace rights played no part in the decision of Mr De Angelis and the recommendation of Mr Kerswell is not conclusive of the applicant’s case with respect to the termination of his employment. Regard should also be had to the basis for the underlying recommendation on which they acted. If those making the recommendation to Mr De Angelis did so because of the making of the applicant’s First Complaint, Transfield would not discharge the s 361 onus. This is evidenced by the authorities.
[122] In Voigtsberger v Council of the Shire of Pine Rivers (No 2) [1981] FCA 207; (1981) 58 FLR 239, the finance committee of the respondents Council had recommended that the applicant’s position be abolished. The report of the finance committee was adopted later that same day by the full Council. Evatt J held at 256 that the decision of the finance committee was the critical decision in the case because the full Council had merely rubber stamped its recommendation. Accordingly, it was essential that the Court have evidence from the members of the finance committee so that it could determine whether a proscribed reason had been a substantial and operative factor influencing the decision of any individual councillor.
[123] Smithers J addressed the question of principle involved in Wood (on behalf of the Industrial Relations Bureau) v Lord Mayor, Councillors and Citizens of the City of Melbourne [1979] FCA 22; (1979) 41 FLR 1 at 19 in a context analogous to the present:
[19] In the task of ascertaining the mind of the defendant corporation, with respect to the standing down of Mr Kane, that mind may be located in the mind of one authorised officer or of more than one person exercising the executive power of the corporation. It is a pure question of fact where in particular circumstances that corporate mind may be located. In a case where two officers are concerned in the solution of an administrative problem and are working jointly to solve it and decide what the corporation is to do and are working in harmony and in full confidence, the one with the other, the mind of the corporation is to be found in the course of conduct agreed upon between them and the reasons which in the end are the operating reasons for the policy agreed upon.
However, as Smithers J went on to acknowledge, that does not preclude the possibility that one of the participants may have as his or his motive an undisclosed proscribed reason for joining in the decision.
[124] Gray J also noted the issue in Gibbs v Palmerston Town Council (unreported, 21 December 1987) at 84‑5 when he said:
[T]here is still a difficult question of the extent to which the improper purpose of one person may be a substantial operative factor in the decision of another. Clearly, if the actual decision maker simply “rubber stamps” a decision in fact made by another, the purpose of that other will be a substantial operative factor. At the other extreme, if the actual decision maker truly believes the false and innocent reasons advised by the other person, the mind of the decision maker will not be tainted by the improper purpose of the other person. The problem assumes greater complexity when the decision is made by more than one person, as might be the case with the board of directors of a company, and as is often the case when the decision is made by a local government authority.
[125] Gray J reviewed and applied these authorities in National Tertiary Education Union v Royal Melbourne Institute of Technology [2013] FCA 451 at [25]‑[29].
[126] Counsel for the applicant referred to Rowland v Alfred Health [2014] FCA 2. The decision in that case confirms that it is appropriate to have regard to the reasons actuating the members of a selection committee making a recommendation, and not just to the reasons of the ultimate decision maker.
[127] Accordingly, it is appropriate in the present case to have close regard to the reasons of those who made the recommendations to Mr De Angelis and Mr Kerswell. This includes their reasons for recommending the restructure which Transfield adopted as well as their reasons for selecting the applicant as a person to be made redundant in consequence of that restructure. The evidence of Mr Rynja and Mr Hall is particularly significant in this respect. Mr Handy did not contribute to the recommendation to Mr De Angelis, and Mr Vigus had only a limited role.
It will always be a question of fact as to whether the alleged proscribed reasons said to constitute the reason/reasons or motive for the taking of the adverse action have been rebutted. Motive is a relevant consideration for the Court to have regard to when assessing the evidence before it.
Whether or not a complaint or inquiry has been made by an employee in relation to their employment for the purposes of s. 341(1)(c)(ii) of the FWA is a question of fact and is to be considered objectively.
In this proceeding, the respondents denied that the termination of the applicant’s employment constituted the taking of adverse action for a prohibited reason under s. 340(1)(a) or (b) of the FWA.
The Evidence
At [147] of the SOC it was pleaded on behalf of Lord that the adverse action taken by Toll in its termination of his employment was because of the series of complaints made by him about the workplace bullying of Talevski and its adverse impacts upon his mental health. It was alleged that such conduct contravened the provisions of ss. 340(1)(a)(ii) and 340(1)(b) of the FWA.
Lord’s affidavit evidence was generally consistent with his pleaded case. The Court accepts that when complaining to others about Talevski’s treatment of him, Lord was exercising a workplace right. The onus was on the respondents to satisfy the Court that the making of complaints by Lord about Talevski was not the reason for the termination of his employment.
One Mr Challis was called to give evidence on behalf of the applicant. He was a human resources (HR) manager. Though Challis said that Lord had never used the word bullying to him, he corroborated Lord’s evidence that Lord had complained to him about Talevski. He confirmed that Lord said that he did not want to make a formal complaint about Talevski’s behaviour. [7] Challis also confirmed that he did not pass on the fact that Lord had made complaints concerning Talevski to either Beacham, Rugendyke or de Lange Savage, because he believed that Lord did not want to take that course of action. [8]
One Mr Pollington, a former Executive General Manager of NQX in the Toll Group, was the last witness called to give evidence on behalf of Lord. Pollington gave evidence that from mid-2017 until the time he retired from Toll at the end of 2018 the financial performance of the Toll business was “terrible”. [9] He also gave evidence that he worked for Toll between 1998 and 2018 – a period of some 20 years. Relevantly, Pollington gave evidence that prior to his retirement, the then President of Toll Global Express, one Bruce Wilson, said to him that some “succession planning” was needed to be done in respect of his role. During a later conversation, Pollington’s unchallenged evidence was that Wilson had said to him that when he finished up working for Toll he would be paid to sit on a beach for 6 months – namely a 6 month notice period prior to or at the time of termination. Pollington otherwise did not give evidence of relevance concerning Lord complaining to him about Talevski, or about any adverse effects said by Lord to have been the result of Talevski’s conduct toward Lord.
Underlying the respondents’ defence was the claimed need for the first respondent to take a new direction with a new leadership team to stop Toll suffering ongoing financial losses across its operations. In the context of Rugendyke having taken on the role of Executive Manager of national operations, Lord was cross-examined about the projected financial losses of the Queensland operations for the period between 1 April 2020 to 30 March 2021 as follows: [10]
MR MURDOCH: Yes.
Mr Lord, I will just – to be fair to you, I will ask – just ask you the question again. What we suggest to you is that for the financial year 1 April 2020 to 30 March 2021, that as at the time of the notice of termination of your employment, the Queensland business was tracking towards an EBIT (namely Earnings Before Income Tax) loss of almost $17 million; do you accept that? — I accept that that’s what it says on here. My recollection is that it wasn’t anywhere near that.
Now, when you say your recollection was that it wasn’t anywhere near that, the business was still tracking towards a loss, wasn’t it? — Yes, it was.
Yes. Now, you accept as a basic proposition that the Palletised Express business wasn’t in business to be making a loss, was it? — No.
No. Now, Mr Rugendyke – he became the person to whom you directly reported in November 2020, didn’t he? Yes? — Yes.
Yes. And from that time on, he held weekly meetings with the general managers such as yourself, didn’t he? — Yes.
Yes. There was a one-on-one with you every fortnight, wasn’t there? — Wasn’t religious, but we had one-on-ones.
Yes. Yes.
HIS HONOUR: Could I ask, Mr Lord, was Mr Rugendyke someone who had been within the company, to your knowledge, for a long time, or had he come from overseas? — No, he – he came from another part of the Toll Group.
Where? — It’s – it’s – it’s called Express Parcels, which is where Mr Beacham came from.
Yes. And was that within Australia or …? — Yes.
— outside Australia? — In – he was in New South Wales.
I beg your pardon? — He was in New South Wales.
All right.
MR MURDOCH: And can I suggest to you that in the course of those weekly meetings, Mr Rugendyke would regularly speak about the need to improve profitability? — Yes.
Yes. Regularly speak about the importance of service delivery? — Yes.
The importance of working on relationships with customers? — Yes.
Yes. And that steps needed to be taken to return the business to profit? — Yes.
Yes. Now, Mr Rugendyke also, can I suggest, had discussions with you specifically about the performance of the Queensland operations? — Yes, and every other state.
Yes. And the need to improve service performance in Queensland? — Yes.
The need to improve financial performance in Queensland? — Yes.
Correct? — Correct.
Curiously, during the course of the trial Lord failed to acknowledge that Toll was in a dire financial position. Rather, Lord was solely focused upon what no doubt had been hurtful and unwarranted bullying by Talevski. The Court finds that Rugendyke saw his new role as one designed to turn Toll’s fortunes around by adopting a different approach to that approach which clearly had not earlier been successful. Lord was focused upon how he had been mistreated by Talevski. He didn’t focus upon the wider picture. An example of how Lord was fixated on Talevski’s treatment of him was seen in the cross-examination of Lord by Senior Counsel for the 1st, 3rd and 4th respondents. The following transcript record related to Lord having complained to Rugendyke about Talevski’s behaviour well after Talevski had left the business: [11]
MR MURDOCH: And another occasion where you raised matters concerning Mr Talevski in the November was during an MS Teams meeting, wasn’t it? — Yes.
With Mr Rugendyke and other Queensland managers? — Yes.
Yes. And that was the context in which all of these November discussions occurred, wasn’t it, the dinner and then group meetings? — And one-on-ones and at any point that I could have a discussion about it.
And can I suggest that what you were doing in those November discussions was providing Mr Rugendyke as the person coming into the business with what you considered to be important context about what happened in the past? — Correct.
And including the impact you say Mr Talevski had on yourself? — Correct.
And on the business more generally? — Correct.
Yes. And you weren’t seeking him to do anything about redressing it, in terms of Mr Talevski, were you? — I spoke to Mr Rugendyke about how it affected me, how it affected my health, how it – to give him an indication of where I was in my life with what had happened and has still happened to me. So there was no – no way that he could give me redress of Mr Talevski no longer being there. But I was certainly giving my truthful description of what had happened from day dot with Mr Talevski and how it has affected me since to date.
And you weren’t seeking for Mr Rugendyke to do anything in particular about that, were you? — I wanted to make it known that I was still very much affected by it.
So you’re providing him with information about you being affected by what you say was Mr Talevski’s behaviour? — Yes.
Yes. For Mr Rugendyke’s own knowledge? — For him to also – being in the position that he was, so that he could give that understanding to the hierarchy, the higher – Mr Beacham and so on and so forth.
HIS HONOUR: What was the point of you doing that after Talevski had effectively left the business? It’s, to …? — Only because
use a phrase, flogging a dead horse? — Only because it was dear to my heart and it did and still does affect me to this day. And it’s just something that I talk – I still talk about today.
How many times have you spoken to Rugendyke in the context of your complaining about what Talevski had done to you after you knew that Talevski was no longer having anything to do with the business, as far as you’re concerned? — I would only be guessing, your Honour, but half a dozen times.
Over what period of time? — You certainly said it occurred in November of 2020? Yes. From then until when I was terminated.
MR MURDOCH: And you give some more evidence about this – I’m sorry, your Honour. Had your Honour
HIS HONOUR: Yes, I’ve finished.
MR MURDOCH: You give some more evidence about this paragraph 197 and 198 of your affidavit, and that’s where you refer to discussions – I withdraw that. That’s where you refer to what you say was continuing to complain to Mr Rugendyke after Mr Talevski’s removal? — Yes.
And then 198 you refer to having face-to-face discussions with Mr Rugendyke about Mr Talevski after he had been removed? — Yes.
So again, you’ve tried in 197 and 198 to give your best evidence about those conversations, haven’t you? — If that’s what you want to call it.
And again, we don’t see any evidence of you asking Mr Rugendyke to do anything in particular, do we? — No.
And can I suggest again that what you were doing there was providing Mr Rugendyke with what you considered to be relevant information about Mr Talevski’s effect on you, so he would know about it? — And so he could pass that on and understand that I was and am the way I am today because of Mr Talevski.
Excuse me a moment, your Honour. And nowhere in your affidavit, as we read it, do you say that you indicated or asked Mr Rugendyke to pass this material on to anybody, do you? — No, and there’s a good reason for that.
Though Lord gave evidence that there was a good reason why he didn’t ask Rugendyke to pass relevant information on to someone else concerning the effect of Talevski’s bullying upon him – such as by asking Rugendyke to pass information on to Beacham – such evidence was not the subject of further cross-examination by Counsel for Beacham, Counsel for the other respondents, or in Lord’s re-examination. There was no evidence before the Court that any tortious claim had been made by Lord in another Court in relation to Talevski’s alleged bullying.
As to the question of Lord’s termination by Rugendyke in circumstances where Lord had received bonuses up until the 2019 financial year, Rugendyke’s understandable response to cross-examination on point was as follows: [12]
MR ALLAN: Yes. With making your decision to terminate Mr Lord’s employment, did you consider at all reviewing his historical performance in terms of how others had considered him? — No.
And that would have been something, I suggest to you, that it would have been prudent to do in the context of making the decision to dismiss an employee of 34 years service that held the position of State manager? — That’s not the assessment I made when considering what the business needs going forward.
So yours was a forward-looking decision only. Correct? — Yes.
And it wasn’t based at all on any past performance by Mr Lord? — That’s incorrect. So in the past – as I said, in the past 12 to 24 months, the performance of that business had deteriorated.
Right. So we’re looking at a window during the COVID period of 12 months that affected – materially affected your decision-making to terminate Mr Lord? — COVID was present during that period. Yes.
No, that’s not my question. I said we’re looking at a window of 12 months that materially affected your determination during the COVID period to terminate Mr Lord? — The period was longer than 12 months. But yes.
So you went back further than 12 months when you considered his performance? — Performance over longer range. Yes.
Yes. These are – and you looked at that by reference to the profit and loss statements ? — Profit and loss.
that we don’t have, and we can’t find? — Service performance and safety performance. Yes.
Yes. And you considered, based on that, that it was unnecessary to consult with anybody else about whether or not you should terminate Mr Lord’s …? — I have a responsibility for the business. I am mandated to turn the business around in two years. The business, the total business was going to lose – or did lose 42 million. Queensland lost 17 million. I had to make – I had to make decisions to turn the business around for the future.
For someone else’s future. The new owner was Allegro Funds? — That’s irrelevant.
Why is that? — Because it’s my job. I’m responsible for the business. I’m responsible for P&L performance. I’m responsible for the state of that business. I’m responsible for the way it’s led. I’m responsible for the way it serves its customers. That is my job.
Well, it may have been the case if there had been a contract for the sale of Allegro Funds that contained clauses associated with, for example, key performance indicators being met and an instalment contract. But that wasn’t the case, and you don’t know? — It’s completely irrelevant to my decision.
I see. Thank you.
HIS HONOUR: Why would performance KPIs being met not be relevant to a decision to terminate? — The question I was asked, your Honour, was pointing towards
Please just go back a bit from the microphone? — Sorry. The question I was asked was pointing towards was my decision swayed by the Allegro sale. It had nothing to do with the Allegro sale. It had nothing to do with it.
All right. But I’m asking you why wouldn’t meeting KPIs, so as to give rise to a payment of a bonus or an incentive payment, not be relevant to your consideration. Because if you look at page 715(c), you will see that his – can you go to that document? — I know the – I know the document. That’s the
Well, could you go to it? — The STI.
Well, could you go to it? — Sorry, your Honour. Yes.
Well, why wouldn’t you look at someone’s past history of bonus payments being made to them, in the context of reaching KPIs, as a factor to take into account when determining whether to terminate or not? — Because the business at the time was in a very different state to what it was back in 2019. So
But so was every business in the country. Every business in the country was on its knees? — Parts of our – parts of business were actually performing very, very well through COVID. So the Pallestised Express business, at the start of COVID, was – there was some very good volume of revenue going through that business. And that – yes, there were parts of it that were hurting. But, again, the way I saw Mr Lord taking action on costs and the management of service and his presence in the Queensland business, where we needed him the most, that was lacking. And I felt we needed a different leadership approach going forward.
The fact that Lord continued to complain to Rugendyke about his having been bullied by Talevski, well after Talevski had left the business, was hard to understand, particularly in circumstances where Lord had made it clear that he didn’t want to lodge a formal complaint in relation to such bullying. Rugendyke was a newly appointed senior manager who the Court accepts wanted to get on with the job of increasing productivity and revenue. His focus was on doing just that, not on Talevski’s treatment of Lord in the past.
Rugendyke’s evidence was that he commenced in the role of acting Executive General Manager for Toll Global Express in November 2020. [13] In such capacity, Rugendyke made changes across the board at a senior management level. In a relatively short period of time, Lord was the fifth person of equal seniority whose employment was either the subject of a redundancy, a forced resignation or a termination engineered by Rugendyke. Those other than Lord occupied the same roles in different states. Rugendyke’s evidence on point was as follows: [14]
HIS HONOUR: I have a few questions of you, Mr Rugendyke. You said in cross-examination earlier that there was a team comprised of state managers? — Yes.
who were in the same role as Mr Lord? — Yes.
Is that correct? — It is.
And that you used to have regular meetings? — Yes.
After – or either before or after the termination of Mr Lord’s employment? — Yes.
did you make the decision to terminate the employment of any of the other state managers in Australia? — Yes. So Nick Galliano was the – Nick
Who was he and which state or territory? — So Nick Galliano was the general manager of national operations. He was exited on a redundancy. Jamie
What does that mean? — His – his role was deemed surplus to requirement.
He is what? — He was surplus to requirement, and we restructured and made his role redundant. Jamie Prima was on a performance management plan.
Please just sit back a bit? — Sorry.
from that microphone? — Sorry, your Honour.
or lift it up or do something to ? — Stop the feedback.
be less aggressive toward it? — Jamie Prima was on a performance management plan. He chose – he – he chose to leave. David McGregor
Well, so you didn’t terminate him? — No, but he was – it was a
And what about the first chap, Galliano? You didn’t ? — He was made redundant.
You didn’t terminate him? — I didn’t terminate him.
All right? — David McGregor was terminated, but we agreed that
Where was he? — He was Victoria general manager.
Right? — And – and he agreed
And what – and on what date was he terminated? — August of the same year, from memory.
’21? — Yes.
Right? — And he – we agreed that he would resign, so it was either going to be a termination or a resign.
Well, he wasn’t terminated then ? — The discussion I had with David as I
because he resigned he didn’t terminate? — The discussion I had with David was, “We’re either going to terminate your employment.” He said, “Can I resign?” and I said “yes”.
All right. Well, yes. Anyone else? — Gary Murek came probably 12 months after that. Gary Murek was the – the general manager of Western Australia, and he exited on the same basis that I said, “We’re going to terminate your employment.” And he asked if he could resign, and I said “yes”.
All right. So out of all those people, there was no formal terminations of your employment? — Correct.
Now, did you have any discussions with Mr Beacham in terms of the targeting of personnel for consideration for termination immediately prior to the time you were appointed ? — No.
in November of 2020? — No. I was given full authority, your Honour, to review the business and make decisions of my own volition.
And was that authority given to you by Mr Beacham? — It was.
So when you said earlier you couldn’t remember who gave you the authority ? — Mr Beacham gave me the authority.
It was Mr Beacham? — Yes.
As Rugendyke’s superior, Beacham had the relevant authority to allow Rugendyke to have a free reign in terms of hiring and firing within the business. The Court finds that Beacham gave authority to Rugendyke to do what he thought best concerning ongoing operations of the business under his control, and that Rugendyke exercised such authority. That included taking action against the other then existing state managers such as Lord. In the context of action having been taken by Rugendyke against other state managers, there was no evidence that Beacham sought to override any of the actions taken by Rugendyke either in relation to Lord or in relation to the other state managers.
Beacham’s focus was also upon improving the productivity and profitability of company operations. His evidence on point was as follows: [15]
MR MACKIE: Could you turn to paragraph 38(i), which is at page 488? Did you have any comments on this paragraph? — I would like to update the typographical error where it reads towards the end of the paragraph, 13 October 2024. That should read 13 October 2020. I apologise.
Thank you. Could you please turn to paragraph 19, which is page 483? Do you have any clarification on this paragraph? — I would like to clarify that this statement is true in the context of the nature of a bullying allegation, but I had spoken to Craig Neilsen on 9 October, where Craig Neilsen did raise that I may wish to speak to other general managers around Mr Talevski’s behaviour and approach.
Okay. Thank you.
HIS HONOUR: Now, sorry, who was it that you spoke to? You said ? — Craig Neilsen, from the
Who rang who? — I rang Craig Neilsen in a discussion that I was conducting, trying to understand about Mr Talevski’s performance.
And who is Craig Neilsen? — He was the general manager of finance in the Palletised Express division, working for Chris Talevski.
He was general manager of finance in which division? — In the Palletised Express division.
MR MACKIE: I might be able to clarify this for your Honour.
Mr Beacham, did you make a note of that conversation at all? — Yes, I did. It is in my affidavit.
Could you – perhaps if I took you to page 499.
HIS HONOUR: Did you say, Mr Beacham, that Mr Neilson told you that Mr Lord had accused Talevski of bullying ? — No.
him? — No, he did not. That’s what I want to clarify is – you – you could misinterpret the sequence of dates. The – the first I heard was in a conversation on the twenty – 13. That is the first I heard on – in – on 13 October, in a conversation with Mr Lord, about an allegation of bullying
Yes? — from Mr Lord, but I did hear a comment about behaviour from Mr Neilson on 9 October, and I just wanted to clarify that for the court.
And what was the nature of the conversation that you had with Mr Neilson? — The nature of the conversation was the performance of the business was – was not good. We were trying to transform it. I was trying to ascertain Mr Neilson’s opinion, as the head of finance, around the performance of the business and what he felt were the causes and how the business was approaching the turnaround. We – we were in the middle of needing to – to turn around the overall division that I was responsible for, and in that conversation, he gave me the comment that he thinks Kris is too aggressive – this is Mr Talevski – in his approach to people and that other GMs would feel the same and I should speak to them, which I subsequently did and is – and is contained within this affidavit annexure of those conversations.
Yes.
MR MACKIE: Perhaps it would assist, your Honour, if I refer the court to pages 499 and 500 of the court book.
HIS HONOUR: Just bear with me for a minute.
So to the extent that you’ve said in paragraph 19 of your affidavit that the first time that you heard any concerns about Talevski’s conduct toward others was on 13 October 2020, that’s incorrect? — Correct.
Because you spoke to Neilson before then? — Correct. But it was the first time
And you spoke to Lord on 9 October, which was before then? — I – I did not speak to Lord on 9 October, sorry, your Honour.
Well, who did you speak to on 9 October? — Craig Neilson, the general manager of finance.
Okay. Yes. All right. Page 500, did you say?
MR MACKIE: Yes. Mr Beacham was just referring to a note, and I was going to ask him to turn to page 499 and, over the page, 500.
Is that the note you were referring to? — That is correct.
The Court accepted that Beacham was an honest witness doing his best to remember events which occurred some 5 years earlier. The Court further accepts the pleaded case of the 1st, 3rd and 4th respondents at [83](e) of their defence that Rugendyke was indifferent to the fact that Talevski had bullied Lord.
The Court finds that Rugendyke had been invested by Beacham with wide general authority to do what he thought best in relation to turning the business around. The Court accepts the evidence of Beacham that prior to Lord’s dismissal on 9 March 2021, Rugendyke would have most likely first informed Beacham that Lord’s termination should occur. Beacham had a practice of informing managers of lesser seniority to him that they should first inform their superiors of an intention to terminate before they did so. That most likely occurred in this instance.
The evidence of Beacham was relevantly as follows: [16]
All right. And you go down, and you refer to this sense-checking role. Just explain what a sense-checking role is? — I think the easiest way to understand how I operate is to
How you did operate? — How I did operate, and how I do continue to operate, is in how I asked my immediate manager for Kris Talevski to leave the business. I made the decision for Kris Talevski to leave the business, and I asked my immediate manager for support in that decision. That is how I – that is the conduct – how I perform myself, and the conduct that I expect of my managers, that if they are looking to terminate someone’s employment, that they should sense-check it with their one-up manager. It is good practice, and recognised as good practice.
But the decision to terminate Mr Lord’s employment, as you just agreed, has already been made by Mr Rugendyke; correct? — So he has made the decision
And now ? — He’s seeking endorsement
your – he has – on your best recollection, he has spoken to you, and in a sense-checking role; correct? — Correct.
And it ? — As I did with Kris Talevski.
Yes. And then you say down the bottom of paragraph 33, “Adopting this role, I would never fail to question any decision to dismiss an employee, if I believe they were being dismissed for reasons that were not appropriate in any line with Fair Work legislation”; correct? — Correct.
But you didn’t know the reasons, did you? Why, Mr Rugendyke ? — So I can’t recall the exact way in which – and I’ve searched for
I should finish that question, I apologise? — Okay.
You didn’t know the reasons that Mr Rugendyke actually dismissed Mr Lord, did you? — I believe it is likely that I would have known the reasons, because Mr Rugendyke
No, don’t speculate, sir. Just answer my question, please? — Okay.
You didn’t know the reasons, did you? — I would have known the reasons, because
Well, that’s not what you’ve stated under oath in your affidavit in paragraph 32. You just accepted it was speculation, what you’ve written there? — If I can clarify how I’ve worded that, and clarify the thing. It is likely on the basis of all of the people that – you know, as I’ve worked through my career, whenever there has been someone who worked for me wishing to dismiss someone, I’ve inquired around their reasons, and why they would like to dismiss it. And so I’m saying that it is likely that Mr Rugendyke has formed a view over his time, and provided regular feedback to Mr Lord, and at some point he will have notified me of his decision to terminate Mr Lord. In that notification, he will give – have given a justification, and I will have inquired around that justification as to those reasons, and it will be situated with the ongoing discussions that I typically have with a manager of – that works for me, about the performance of the business, the performance of their team, and that can be evidenced in the conduct of performance reviews, and other aspects.
Toll’s operative mind for the purposes of assessing motive in relation to Lord’s termination was that of Rugendyke. Beacham rubber-stamped what Rugendyke wanted to do. Rugendyke was not motivated to terminate Lord’s employment because of anything to do with Talevski or the making of complaints by Lord in relation to any of Talevski’s conduct toward him. Rugendyke’s evidence was supported by de Lange Savage. [17]
Further, the fact that Rugendyke had praised Lord on 9 February 2021[18] for his having instructed junior managers to take action to increase productivity and profitability was of no moment. An email sent by Rugendyke to a large number of people within the business on 4 March 2021 – some five (5) days before Lord’s termination – fell into the same category. [19] Rugendyke’s evidence during his cross-examination on point, which was accepted by the Court as being truthful, was as follows: [20]
MR ALLAN: And can I now ask you to turn to tab 27. And this is an email that you have sent, Mr Rugendyke, on 4 March at 1.34 pm. You see that? — I do.
And you sent that to the Palletised Express leadership team. Is that correct? — Among several other teams, yes.
Yes. And was Mr Lord part of the Palletised Express leadership team? — He was.
And in that particular email
HIS HONOUR: Sorry. Behind which tab?
MR ALLAN: 27, your Honour.
HIS HONOUR: 27. Yes.
MR ALLAN: And the document speaks for itself. But you’re essentially congratulating all the recipients of the email on a really strong result during week 47. Correct? — There was probably 200 people on that email.
Yes? — So it was a collective effort for week 47. So I was congratulating the team on the collective result.
And that obviously included the Palletised Express leadership team? — It did.
Yes. So then, I would ask you to look at the third line of that email. You say this:
You are delivering upon your course correction plans in good order and continued improvements will see us on the right trajectory in financial year ’22.
Do you see that? — I did.
And as at 4 March, then, in 2021, is it reasonable to infer that you didn’t have any concerns with the performance of the members of your leadership team, including Mr Lord? — No.
Right. So somewhere between the dates of 9 February 2021 and the sending of this email, despite its complimentary content, you made the decision, you alone, to terminate Mr Lord’s employment? — I did.
And
HIS HONOUR: Sorry, just let me get that clear. As at 4 March ’21, you hadn’t decided that Mr Lord was worthy of termination? — Sorry. I had. So I had concerns of the leadership capabilities of – the capability of some of my leaders in the team at that point. Yes.
I’m talking about Mr Lord, not other members of your team? — At 4 March, I certainly made a decision that we need to move on Mr Lord. Yes.
Well, why did you send a letter congratulating him on 4 March? — I congratulated a team of 200 people
But he — ? — your Honour, of which he was in
But he was included? — But it is my role as a leader to continue to encourage the entire business to move forward with the course correction plans that were in place.
Well, was it a misleading email? — No, it wasn’t. Because there are multiple people responsible and involved in the course correction activities. I would also say in the email, your Honour, that we must balance the management of cost with service improvement. And service was declining on the back of the cost actions that had been taken. I call that out in the email, that there has to be a balance.
The Court finds that de Lange Savage was not responsible for the decision to terminate Lord’s employment. She provided legal advice on the question of what relevant notice period Lord ought to be given, but she was otherwise not involved in his termination. She had no recollection of Lord having ever made a formal complaint to her about Talevski. [21]
Another witness called on behalf of the respondents was one Mr Lombardi who confirmed that, in a meeting between him, Talevski and Lord held in June 2020, Lord had said that he had been targeted by Talevski in a performance meeting. Though perhaps constituting the making of a complaint, there was no other evidence which causally connected such occurrence to Lord’s termination of employment. It was conduct at a time well before Rugendyke had assumed his new role.
Findings
The Court finds that Lord failed to establish that the termination of his employment was because of the making of any complaints by him about Talevski’s behaviour toward him. The evidence adduced on behalf of the respondents was clear, concise and plausible. The applicant’s evidence was based on conjecture unsupported by any prohibitive oral or documentary evidence.
The Court finds that the respondents have discharged their evidentiary onus imposed upon them pursuant to the provisions of s. 361 of the FWA. They were not involved in any contravention of the provisions of s. 340 or 545 of the FWA.
The applicant’s claims for compensation and the imposition of pecuniary penalties are accordingly dismissed.
The Applicant’s Breach of Contract Claim
The applicant was a long-term, faithful servant during the 34-year period of his employment by the Toll Group of companies. The Court finds that had Lord’s employment not been terminated, he would have been ready, willing and able to continue in his role until his retirement. [22]
Clause 7(a) of Annexure A to the Offer of Employment was incorporated as part of the written employment contract between Lord and Toll. [23]
Under the heading 7. Termination of Employment, such clause read as follows:
(a) Either you or Toll may terminate your employment at any time by giving months’ written notice.
The Court accepts the submission made on behalf of Lord that Toll could not unilaterally seek to amend the terms of Clause 7(a) of the written contract between it and Lord so as to provide for the giving of a 3-month period of notice prior to termination. So much is trite.
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 Court respectfully adopts what McHugh JA held at pp. 443 B – 445 F and at 448 E – F in Crawford Fitting Co & Ors v Sydney Valve & Fittings Pty Ltd (1988) 14 NSWLR 439 which was as follows:
443B The principles applicable:
When the question arises whether a commercial agreement for an indefinite period may be terminated, the answer depends upon whether the agreement contains an implied term to that effect: Winter Garden Theatre (London) Ltd v Millenium Productions Ltd [1948] AC 173 at 205; Martin- Baker Aircraft Co Ltd v Canadian Flight Equipment Ltd [1955] 2 QB 556 at 581; Australian Blue Metal Ltd v Hughes [1962] UKPC 23; [1963] AC 74 at 97; Decro-Wall International SA v Practitioners in Marketing Ltd [1971] 1 WLR 361 at 371, 376; [1971] 2 All ER 216 at 224, 229 and Barro Group Pty Ltd v Fraser [1985] VicRp 59; [1985] VR 577 at 583-584, 585. The existence of the term is a matter of construction. But the question of construction does not depend only upon a textual examination of the words or writings of the parties. It also involves consideration of the subject matter of the agreement, the circumstances in which it was made, and the provisions to which the parties have or have not agreed: Re Spenborough Urban District Council’s Agreement [1968] Ch 139 at 147.
In Llanelly Railway and Dock Co v London and North Western Railway Co (1875) LR 7 HL 550, Lord Selborne declared (at 567) that:
“an agreement de futuro, extending over a tract of time which, on the face of the instrument, is indefinite and unlimited, must (in general) throw upon anyone alleging that it is not perpetual, the burden of proving that allegation, either from the nature of the subject, or from some rule of law applicable thereto.”
In Llanelly the House of Lords held that an agreement by which a railway company was given running powers over another company’s lines was a permanent and not a terminable agreement. However, with the exception of Lord Selborne, the judgments of the other members of the House were based on the terms of the agreement and not upon any general principle of construction: see Lord Cairns (at 560), Lord Chelmsford (at 561), and Lord Hatherley (at 565).
Although even in the second half of this century the law has been stated to be in accordance with the speech of Lord Selborne in Llanelly (see Halsbury, 3rd ed, Vol 8, par 267 at 156), the weight of twentieth century authority makes it difficult to hold that there is any presumption of perpetuity in the case of commercial agreements: Crediton Gas Co v Crediton Urban Council [1928] Ch 447; Winter Garden Theatre (London) Ltd v Millenium Productions Ltd; Martin-Baker Aircraft Co Ltd v Canadian Flight Equipment Ltd; Re Spenborough Urban District Council’s Agreement; Australian Blue Metal Ltd v Hughes and Decro-Wall International SA v Practitioners in Marketing Ltd.
In Martin-Baker Aircraft Co Ltd v Canadian Flight Equipment Ltd, McNair J said (at 577) that there is no presumption of permanency in the case of an indefinite commercial agreement but that if there is it is in favour of termination and not perpetuity. Buckley J has also expressed the view that there is no presumption either way: Re Spenborough Urban District Council’s Agreement (at 150). To the same effect is the judgment of Lockhart J in State Bank of New South Wales v Commonwealth Savings Bank of Australia (1985) 6 FCR 524 at 554; 60 ALR 73 at 101. However, it is not easy to reconcile these statements with the principle that there is a general presumption against adding to a contract a term which the parties have not expressed: Luxor (Eastbourne) Ltd v Cooper [1941] AC 108 at 137 per Lord Wright. In principle, the better view would seem to be that, although there is presumption against implying a term that an agreement is terminable, ordinarily the nature of a commercial agreement will lead to the conclusion that the parties must have intended it to be terminable on notice. This was the effect of the approach of the courts in Winter Garden; Martin-Baker; Spenborough and Decro-Wall.
Whether a contract is terminable on reasonable notice instead of at will also depends upon the existence of an implied term: Winter Garden Theatre (London) Ltd v Millenium Productions Ltd (at 206); Martin-Baker Aircraft Co Ltd v Canadian Flight Equipment Ltd (at 581); Australian Blue Metal Ltd v Hughes (at 99). That question is determined by the circumstances existing at the date of the contract: Australian Blue Metal Ltd v Hughes (at 99). However, the reasonableness of the period of notice depends upon the circumstances existing when the notice is given: Winter Garden Theatre (London) Ltd v Millenium Productions Ltd (at 199-200); Australian Blue Metal Ltd v Hughes (at 99); W K Witt (WA) Pty Ltd v Metters Ltd and General Industries Ltd [1967] WAR 15 at 23-24; Decro-Wall International SA v Practitioners in Marketing Ltd (at 370; 224; 376-377; 229; 381; 234).
When a contract is terminable on reasonable notice, the period of notice must be sufficiently long to enable the recipient to deploy his labour and equipment in alternative employment, to carry out his commitments, to bring current negotiations to fruition and to wind up the association in a businesslike manner: Winter Garden Theatre (London) Ltd v Millenium Productions Ltd (at 200-201); Australian Blue Metal Ltd v Hughes (at 99) and W K Witt (W A) Pty Ltd v Metters Ltd (at 24-25). But in the latter case Hale J denied (at 23) that it is relevant to the reasonableness of the period of notice that the recipient needs time to recoup any expenditure incurred.
The appellants asserted that the decision in W K Witt (W A) Pty Ltd v Metters Ltd and the decision of the Judicial Committee in Australian Blue Metal Ltd v Hughes supported their claim that the reasonableness of a notice period does not take account of the expenditure outlaid by the recipient of the notice or his efforts in creating the conditions which will enable profits to be earned in the future. The appellants contended that these matters are only relevant in determining whether the agreement has existed for a reasonable period.
In W K Witt (W A) Pty Ltd an agent expended time and money in developing overseas markets and securing orders. After the relationship of the parties had been in existence for almost two and a half years, the manufacturer gave less than four months notice of termination. The agent claimed that it should have twelve months notice because another year was needed to recoup its expenditure. Hale J said (at 23) that an implied term requiring reasonable notice of termination should be capable of implementation in a reasonably practicable manner and that the task would be difficult and virtually impossible if the manufacturer needed to form an opinion “based on the profit which the plaintiff might be expected to make in the future”. He rejected the agent’s contention.
In Australian Blue Metal Ltd v Hughes, the parties entered into a written agreement which gave the “right to mine for magnesite” in return for a royalty. The Judicial Committee held that the agreement was terminable at will with a period of grace to remove any mineral already mined. However, Lord Devlin, in tendering the advice of the Judicial Committee, said that it would not have made any difference to the result of the appeal if the agreement was terminable only on reasonable notice. He said (at 99):
“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.”
Lord Devlin said that there was no evidence from which it could be inferred that a factor operating in the minds of the parties at the time when the contract was made was that it should not be terminated abruptly just “when their operations were moving out of an unprofitable phase into a profitable one”. He also said that there was insufficient evidence of any heavy initial expenditure which could only be recouped in time. Accordingly, Lord Devlin said (at 99) that the Judicial Committee could not “infer as the common purpose of any requirement of reasonable notice anything more than the ordinary purpose — time on the one hand for the appellants to deploy their labour and equipment profitably elsewhere and, on the other hand, for the respondents to find another licensee”.
Although the Judicial Committee’s references to the common purpose being in existence at the time of the contract and to the lack of evidence of any heavy “initial” expenditure are consistent with the appellant’s contentions in this case, they do not really assist it. The notice in Australian Blue Metal Ltd v Hughes was given within ten weeks of entering into the agreement. The reference to initial heavy expenditure, therefore, does not have the significance which in another context it might have had. Moreover, the common purposes, which give rise to a requirement of reasonable notice, are not necessarily the same for a distributorship agreement, for example, as they are for the type of agreement considered in Australian Blue Metal Ltd v Hughes.
…
448E The chief purpose of a notice for a reasonable period, therefore, is to enable the parties to bring to an end in an orderly way a relationship which, ex hypothesi, has existed for a reasonable period so that they will have a reasonable opportunity to enter into alternative arrangements and to wind up matters which arise out of their relationship. Matters to be wound up will include carrying out existing commitments, bringing current negotiations to fruition, and, where appropriate, obtaining the fruits of any extraordinary expenditure or effort carried out within the scope of the agreement. The line between ordinary recurrent expenditure and effort and extraordinary expenditure and effort will not always be easy to draw. But in general it will be determined by what the parties would reasonably have contemplated was extraordinary effort or expenditure.
In the present case, Lord was a veteran in the Toll Group of companies, his employment with them having spanned 34 years before it was terminated. There was no evidence that during such period of employment Lord had committed any act which constituted misconduct, gross negligence or insubordination. He had a clean employment record and was well liked and loyal. He had been the recipient of bonuses and STI payments for achieving key performance indicators (KPIs) up until the 2019 financial year. The matters listed above were all factors which supported Lord’s claim that a reasonable notice period was 12 months. Further, for such a long-standing employee, 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. Lord’s loyalty and historical knowledge was a valuable asset to Toll across the board and had been for a long period of time.
What is found to be a reasonable period of notice which ought to have been given to Lord must be judged objectively as at the time of the giving of the notice of termination. As earlier referred to in these reasons, Pollington was offered a 6-month notice period after 20 years of service with the Toll Group of companies. Lord’s period of employment was substantially longer.
At the time of termination, Lord was aged 59 years. At that age, Lord’s prospects of transitioning to a position of equal pay and equal seniority were limited. That also ought to have been an important consideration when fixing the termination notice period for such a long-serving employee.
As it happened, Lord did obtain employment with a transport company called Followmont Transport some 4.5 months after his termination on 9 March 2021, but such employment was in the substantially less senior role of Regional Manager for South Queensland and Central Queensland, rather than his prior role as General Manager Queensland for Toll. Further, Lord’s annual salary with Toll was $235,000.00 whereas his starting annual salary with Followmont was substantially less, being $139,726.00. [24] That salary increased marginally over time to $150,000.00 per annum.
Lord has claimed the difference between what he was paid over a 3 month notice period, and what he would have been paid had he been given 12 months’ notice of termination. The Court finds that Toll breached an implied term of the contract of employment between it and Lord by failing to give reasonable notice of the termination of Lord’s employment – namely a 12-month period notice.
Lord has succeeded in his claim for breach of contract, and it is accordingly ordered that Toll pay to Lord the sum of $176,250.00 plus interest at the statutory rate to be agreed between the parties.
Otherwise, Lord’s claims are dismissed.
And it is so ordered.”
Lord v Toll Transport Pty Ltd [2026] FedCFamC2G 348 per Egan J