Termination clauses and notice periods

[Polly]

Hi. We're reviewing our employment contracts and hoping to see if anyone is willing to share their companys employment contract termination clauses? We're looking at notice periods at all levels - especially senior executives. Thanks.

[Maisy H]

Here you go Polly. This one is not designed for senior execs but it includes things that should probably be in all contracts.

Termination of your employment without notice:
You agree that [Employer] may terminate your employment without notice in the event of willful or serious misconduct on your part, which includes, but is not limited to, theft, fraud, misrepresentation, dishonesty, assault, drunkenness, or being under the influence of illicit drugs, refusing to carry out a lawful and reasonable direction or serious breach of our policies.

Termination of your employment on notice:
Subject to this contract, either party may terminate your employment with [Employer] at any time by providing the other party eight (8) weeks notice in writing of the termination date. [Employer] may, at its option, make payment in lieu of notice for part or all of any period of notice of termination.

We also have a bunch of other clauses which relate to Termination, such as Set Off, Return of Property and Information, and Restraint.

For senior execs you may want add a clause relating to "gardening leave", and there may be other things.

Needless to say, it might be wise to get your lawyers to have a look at the final draft

[Polly]

Thanks for this Maisy! We're keen to benchmark our current clause so this is useful, Ta.

[michaelakassar]

Hi Polly,

This looks quite good. However I'd be careful about terminating someone just for not following reasonable directions. You usually have to go through a performance management process and/or discipline first. You need to look at the nature of the situation first, along with the impact on others and the organisation.

However, repeatedly failing to carry out directions can be grounds for termination, but you usually need to give notice (or payment in lieu of notice). Of course, make sure everything is documented so you are in a strong position if an unfair dismissal claim is made against you.

Also, Make sure you check the relevant legislation before submitting the final version of the contract for approval. I assume your are not covered by any Awards.

Hope this helps.



Michaela

[Maisy H]

Michaela,

That's good advice, but remember that the employment contract, deed or agreement may include clauses that would never normally be invoked. To my mind it should cover all worse case scenarios. It is not uncommon to find clauses in employment contracts which may only be enforceable in the most extreme circumstances, but it doesn't hurt to have them in there.

Regardless of what the contract says, in a dispute over termination it would ultimately be decided by a court whether the termination was legal.

Polly, are you wanting a restraint clause as well?

Maisy.

Edit/PS: You wouldn't want to say "If you repeatedly refuse to carry out a lawful and reasonable direction" you may be terminated, because that suggests that there is some level of refusal to carry out duties that is acceptable