In March I blogged about Todd Carney, and his potential legal claim against the Cronulla Sharks for unlawfully terminating his contract of employment. It was of little surprise then to learn that this action has now been brought. The media are describing this action as ‘Unfair Dismissal’. Those familiar with current workplace law will know that this is not strictly correct. ‘Unfair Dismissal’ is a statutory action under the Fair Work Act, which has a jurisdictional restriction to include only employees earning under the $135,000 high income threshold. Todd Carney’s legal claim will be for ‘Unlawful Termination’ by the Cronulla Sharks. This action is based on a common law breach of contract.
The point of this update however, is not to gloat. Nor is it to split hairs about employment law terminology.
Rather, the Todd Carney situation provides a very good example of a common misconception and an error made by many employers under the current statutory environment. Just because someone is exempt from unfair dismissal does not mean that an employer is free to terminate them with no possible remedy. Employees over the threshold can still protected by Contract. Understanding the written document, as well as implied terms, are crucial before making any type of adverse decision against an employee. The liability under contract, particularly if implied terms are left to operate, can be far worse than the penalties prescribed under statute or enforced by the Fair Work Commission for Unfair Dismissal. This recent case is a great example of this.
The Cronalla Sharks may be about to find this out the hard way. And it will likely to be a lot more expensive than a quick trip to a Fair Work Commission conciliation.