A single missing word typo in a contract has cost Australian transport giant Toll $176,250 after a judge ruled a long-serving manager should have received 12 months' notice when he was sacked.
asserted
he → miss → notice
Queensland general manager Rodney Lord was earning $235,000 a year when he was let go in 2021.
asserted
he → earn → 2021
He said Toll executive general manager Michael Rugendyke had told him 'the business was heading in a new direction and needed new leadership'.
asserted
business → say → leadership
Federal Circuit and Family Court Judge Gregory Egan found that Toll breached an implied term of Mr Lord's employment contract by failing to give him 12 months' notice when his job was terminated.
asserted
job → find → notice
The unusual case arose from a drafting error in his contract, which stated either party could end the employment by giving 'months' written notice' but failed to specify the number.
uncertain
party → arise → number
At a meeting in Brisbane on March 9, 2021, Toll executive general manager Michael Rugendyke handed Mr Lord a termination letter giving him three months' notice.
asserted
Rugendyke → hand → notice
Mr Rugendyke also offered him an ex gratia payment of $58,750 if he signed a deed releasing Toll from future claims, the court heard.
uncertain
court → offer → claims
But Mr Lord rejected the offer and later launched legal action.
asserted
Lord → reject → action
A missing word in an employment contract cost transport giant Toll $176,250 after a court ruled Rodney Lord (pictured) was entitled to 12 months' notice instead of three months
Toll executive general manager Michael Rugendyke (pictured) handed Mr Lord the termination letter.
asserted
Rugendyke → miss → letter
He later told the court: 'I had to make decisions to turn the business around'
asserted
I → tell → business
The court heard Mr Lord had spent 34 years climbing through the ranks of the Toll Group, beginning as a supervisor in Toowoomba.
asserted
Lord → hear → Toowoomba
He then became the general manager for Queensland in 2018, overseeing the company's largest state operation by depots, deliveries and employees.
asserted
He → become → depots
Judge Egan described him as a 'long-term, faithful servant' in his decision, published in March this year.
asserted
Egan → describe → March
'There was no evidence that during such period of employment Lord had committed any act which constituted misconduct, gross negligence or insubordination.
asserted
which → be → misconduct
He had a clean employment record and was well liked and loyal,' he said.
asserted
he → have → record
Judge Egan said Mr Lord's lengthy service, loyalty and age justified a much longer notice period than the one he was given.
asserted
he → say → one
'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,' he added.
asserted
he → stand → employment
'At that age, Lord's prospects of transitioning to a position of equal pay and equal seniority were limited.'
asserted
prospects → transition → pay
Mr Lord also alleged in court that he had been dismissed because of complaints he made about an executive he accused of bullying him, but the claims were rejected and Toll's evidence that the termination formed part of a broader effort to overhaul the struggling business was accepted.
uncertain
termination → allege → business
Lawyer Roxanne Hart (pictured) said that if a contract provides for the minimum notice required under the Fair Work Act, an employee in Mr Lord's position would have been entitled to five weeks' notice
'I had to make decisions to turn the business around for the future,' Mr Rugendyke told the court.
asserted
Rugendyke → say → court
He said Toll had lost $42million overall, while the Queensland business was on track to lose about $17million.
asserted
business → say → 17million
'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,' he said.
asserted
he → see → him
Judge Egan noted that, after leaving Toll, Mr Lord found work with rival transport operator Followmont Transport within about four-and-a-half months.
asserted
Lord → note → months
However, the new role was less senior and paid substantially less, with a starting salary of about $140,000 compared with the $235,000 he earned at Toll.
asserted
he → pay → Toll
In finding that 12 months' notice was appropriate, Judge Egan pointed to Mr Lord's 34 years of service, his clean disciplinary record and his seniority within the business.
asserted
Egan → find → business
He also noted Mr Lord's limited prospects of securing a comparable role at age 59 and, unusually, what he described as the need to show a long-serving employee respect.
asserted
he → note → respect
As a result, Judge Egan ordered Toll to pay Mr Lord $176,250 for its breach of an implied term of the contract by failing to give 12 months' notice.
asserted
Egan → order → notice
Mr Rugendyke told the court Toll had lost $42million overall, while the Queensland business was on track to lose about $17million
The sum sought by Mr Lord represented the difference between what he was paid during the three-month notice period and what he would have been issued had he been given 12 months' notice.
asserted
he → tell → notice
Employment lawyer Roxanne Hart said the mistake proved costly because, had the contract simply referred to the minimum notice required under the Fair Work Act, Mr Lord would have been entitled to only five weeks' notice rather than a year.
'
asserted
Lord → say → notice
But what happens is, if the contract does not specify the notice period, the minimum Fair Work Act doesn't actually apply,' she said.
asserted
she → happen → period
So the court will go ahead and apply reasonable notice into the contract, which can be substantially more than what the business is expected to pay.'
asserted
business → go → what
Ms Hart said disputes surrounding notice periods usually arise when there is no valid contract in place.
asserted
disputes → say → place
'Then we have to tell the business, "Well, when you terminate this person, it's not the Fair Work Act minimum notice period, you're actually going to have to give them more notice because you need to give reasonable notice",' she said.
asserted
she → have → notice
'It's always a confusing discussion with the business because they say, "Well, why don't we just give the Fair Work Act notice?"
asserted
we → say → notice
But it doesn't work like that.
asserted
it → work → that
'There is that implied term of reasonable notice, which can be much more.'
asserted
which → be → notice
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