Without cause firing – what are your rights?

Following the firing yesterday (Monday 24 September) of ABC’s Managing Director Michelle Guthrie there is confusion regarding the legalities around a business’ right to fire an employee ‘without cause.’

This clause was included in Michelle Guthrie’s employment contract – meaning her employment could be terminated at any given time without reason for termination.

“How fair is this and what legal recourse is available to her?” WCA Solutions Principal Heather Warner asked today.

“We have recently had a client approach us in a very similar situation and unfortunately the options are limited.”

If termination seems unreasonable, most Australian workers can lodge an unfair dismissal claim through State or Federal legislation. However, in most cases, employees are not eligible to lodge an unfair dismissal application if they are paid above the high-income threshold, which currently sits at $145,400 a year.

“The second avenue available is to consider lodging a Common Law claim of wrongful termination,” Heather explains.

“This is available where the termination breaches one or more terms of the contract of employment, or Common Law provisions/rules in employment law such as discrimination, retaliation, refusal to commit an unlawful act, or when the company does not follow its own termination procedures.

“This process is certainly more onerous and potentially much costlier for the employee than lodging an unfair dismissal application with Fair Work Commission.”

Michelle Guthrie was fired without reason and was not forewarned of any issues regarding her work at the ABC.

“The board felt in the end that her leadership style was not the style that we needed going forward,” stated ABC Chairman, Justin Milne.

For the Chairman this was a simple enough reason to fire Guthrie.

“Guthrie is looking at seeking legal action but I anticipate it is unlikely she will eligible to lodge an unfair dismissal, as we expect her salary would be above the high income threshold.

“If the contract provides for termination without cause, it may be difficult to prove that the termination has been unlawful despite the ‘unfairness’ or the seemingly ‘wrongful’ manner of her termination.

“In the case of our client and ABC’s Michelle Guthrie it seems the employer’s right to terminate without cause leaves the employee pretty much high and dry.

“There are lessons for us all – for Boards/employers: morally how do you want to treat your most senior people? For employees: be sure you understand the implications of your employment contract.”