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Executive Employment Contract Litigation - Australian Law



It is becoming the case that disputes involving executives are better settled on the basis of breach of contract rather that recourse to most statutory provisions for compensation for loss of employment which often cap the amount of the award or preclude eligibility on the basis of salary levels. Probably the most important legislation that executives rely on when pursing a claim for breach of contract against an employer is the Trade Practice Act 1974 which together with the application of case law derived from several substantial breach of employment contract cases has served to increase damages awards over recent years. Courts are now taking a flexible approach to the construction of contracts of employment and in addition to awarding damages for the breach, are also awarding damages for loss of chance and for personal distress provided that the executive has suffered a disturbance to heath or lifestyle.

Letter of Appointment

A formal contract is just that and usually covers most issues that might arise between the employing company and an employee however where appointment on the basis of an exchange of letters with no formal contract, the appointment letter is often silent on a number of important matters. It is often to the executives advantage to be employed on the basis of a simple letter of appointment due to the fact that where the letter of appointment is actually silent on particular matters, then common law prevails which is often more generous to an employee than a carefully drafted contract, usually prepared by the company lawyer. An employee can sue for breach of contract on the basis of either a formal contract or on the basis of contractual terms that may be contained in a letter of appointment or an exchange of letters prior to appointment.

Common Law Rights

If you were employed by a company on the basis of a letter of appointment and the company seeks to unilaterally impose a contract of employment you should take urgent legal advice. A contract of employment will often mean that valuable common law rights are lost and the threat of dismissal upon refusal to enter into the agreement could be the basis of a claim for unfair dismissal or constructive dismissal. Constructive dismissal occurs when an employer’s behaviour is such as to repudiate the employer/employee relationship to the extent that the employee has no real alternative than to terminate their own employment by handing in their notice.

Employment Lawyers

Our specialist solicitors deal with compensation claims for breach of an executives contract of employment. If you would like advice just complete the contact form, or email our offices or use the helpline.