News & Events

New South Wales Supreme Court finds senior employee entitled to 10 months’ reasonable notice of termination

Submitted By Firm: Corrs Chambers Westgarth

Contact(s): John Tuck


Ruth Nocka (Special Counsel), Anthony Forsyth (Consultant) & Joshua Levy (Lawyer)

Date Published: 9/15/2014

Article Type:

Share This:

In Susanna Ma v Expeditors International Pty Ltd [2014] NSWSC 859 (30 June 2014), the New South Wales Supreme Court found that the reasonable notice period to terminate the employment of a long serving senior employee was 10 months.

The Supreme Court also found that payment of the employee’s accrued long service leave should have been based on salary that included incentive payments which formed part of the employee’s remuneration package.

In this In Brief, we examine the decision which again highlights the importance for employers of including an express provision for termination of employment in all contracts of employment.


Ms Ma commenced employment with Samev Pty Ltd (Samev) on 5 January 1987. After Samev entered into a joint venture with Expeditors Inc, Ms Ma’s employment was transferred to Expeditors International Pty Ltd (Expeditors) with effect from 1 July 1988. She was told she would have the same salary and arrangements she had with Samev.

In late 1988, Ms Ma was appointed by Expeditors to the position of Regional Financial Controller, South Pacific Region. Ms Ma remained in this position until her employment was terminated by Expeditors on 6 June 2011. Expeditors terminated Ms Ma’s employment following a dispute over management’s proposal to vary her employment conditions including a 50% reduction in her monthly bonus.

The terms of the relevant contract of employment were contained in a letter dated 26 August 2002. This included salary of $70,000 per annum and an entitlement to a bonus. This was amended to include allowances in 2003. In terms of the amount of remuneration paid to Ms Ma, the bonus represented the vast majority of the total remuneration. There was no express termination provision in the contract.

Expeditors terminated Ms Ma’s employment by paying 5 weeks’ base salary in lieu of notice. Ms Ma claimed that Expeditors was in breach of an implied term of the employment contract by failing to provide reasonable notice of termination of her employment.

Ms Ma claimed that the reasonable notice period was 12 months and therefore she should have been paid an amount of $757,700. This represented her base salary of $70,000 per annum plus bonuses.

What was a reasonable period of notice?

Nicholas AJ of the NSW Supreme Court confirmed that absent evidence to the contrary, a term of reasonable notice is to be implied into a contract of employment. His Honour relied upon well established principles for determining reasonable notice. The length of notice that is reasonable is a question of fact. Therefore it will differ from case to case. It is to be determined after the consideration of all relevant circumstances, mindful that the primary purpose of notice is to enable the employee to obtain new employment of a similar nature.

Applying the principles regarding relevant matters of fact to take into account when determining what is reasonable, Nicholas AJ found that the appropriate period of notice for Ms Ma was 10 months, taking into account the following factors:

  • At the time of termination, Ms Ma was 49 years of age and had been a loyal employee of Expeditors for over 24 years.
  • An accounting team of about 14 people had reported to Ms Ma.
  • Ms Ma held a position of significant seniority and trust for many years as regional controller for the South Pacific region, reporting directly to Expeditors’ managing director. This managing director regarded her as trustworthy and honest, and observed that she worked with high attention to detail.
  • Ms Ma received a substantial remuneration package which was indicative of the high degree of responsibility she had and the dedication in discharging it.

Ms Ma’s future job prospects: failure to mitigate or increasing the notice?

Ms Ma argued that the future prospects for her employment at a similar level were poor and that this was a factor to be taken into account when determining the period of reasonable notice. Ms Ma gave evidence of numerous attempts to find similar work to that which she performed for Expeditors. Expeditors disputed that Ms Ma had actively looked for other work. Expeditors argued she had therefore failed to mitigate her loss and that this should reduce the amount payable to her.

Nicholas AJ found that the evidence unequivocally demonstrated the real difficulty for Ms Ma in finding suitable employment with similar responsibility or remuneration. This was a matter to be given significant weight when determining the reasonable notice period. Hence Nicholas AJ rejected Expeditors’ argument that Ms Ma failed to mitigate her loss, stating the evidence did not support that argument.

Calculation of long service leave in NSW

Ms Ma and Expeditors were also in dispute as to the calculation of her long service leave entitlement. Ms Ma argued that the calculation should be based on her base salary plus bonus whereas Expeditors argued it should be calculated on her base salary alone. Given the bonus represented the majority of Ms Ma’s remuneration, the discrepancy (and therefore Ms Ma’s claim) between the amounts Ms Ma was actually paid and which she argued she should have been paid was $265,373.44.

Under the Long Service Leave Act 1995 (NSW) (LSL Act), the ordinary pay of a worker for the purposes of calculating long service leave entitlements is not to include amounts paid under any bonus or incentive scheme, if the worker’s ordinary pay (excluding bonuses, etc) exceeds the amount of $144,000. The threshold issue to be determined was therefore whether Ms Ma’s “ordinary pay” was less than $144,000.

Ms Ma argued that her ordinary pay was her base pay and allowances. As that amount fell below the amount of $144,000, her substantial bonuses should have been included in the calculation of her long service leave payment. Expeditors claimed that Ms Ma’s calculation failed to take into account any amounts referable to superannuation. The inclusion of superannuation tipped Ms Ma’s annual ordinary pay over the $144,000 threshold.

Nicholas AJ found that Ms Ma’s employment contract did not provide for an “ordinary time rate of pay” but included a number of components and therefore, Ms Ma’s ordinary pay was to be calculated by reference to her “average weekly wage” in accordance with the provisions of the LSL Act. Ms Ma’s average weekly wage included amounts “received” by Ms Ma under the provisions of the LSL Act. His Honour found that because the superannuation contributions could not be accessed by Ms Ma, they were not “received” and therefore did not form part of the calculation of her ordinary pay.

As a result, the amount of Ms Ma’s ordinary pay was below the amount of $144,000. This meant that Ms Ma’s significant bonus was not excluded from the calculation of the long service leave entitlement, increasing the long service leave payment by the amount she claimed, $265,373.44.

Cross-claim by Expeditors

Expeditors cross-claimed against Ms Ma arguing that she was guilty of misconduct in failing to disclose an actual or potential conflict of interest.

This placed Ms Ma in breach of her contractual, fiduciary and statutory duties, and would have justified summary termination of her employment, in which case she would not be entitled to the termination payments. Expeditors’ Code of Business Conduct required declarations of conflicts of interest; and from January 2010, employees were required to complete Quarterly Certifications in relation to conflicts of interest and related party transactions.

His Honour did not need to determine whether the alleged duties existed because he found there was no conflict. His Honour considered the principles relevant to determining whether a conflict exists:

  • A conflict between interest and duty can arise where the personal interest of the fiduciary is pecuniary or non-pecuniary, or direct or indirect.
  • A non-pecuniary interest includes an interest by way of association, whether by way of kinship or business connection.
  • Not all interests are within the conflict rule, and the interest must give rise to a conflict or a real or substantial possibility of a conflict.
  • The existence of a conflict between interest and duty is not dependent on the fiduciary acting with the intention (purpose or motive) of advancing its personal interests.

Nicholas AJ found that no actual or perceived conflict of interest was established. His Honour found that there was uncertainty regarding the extent to which Ms Ma’s brother had an interest in the cleaning business. His Honour also found that Ms Ma was not involved in the engagement of the cleaning company to perform services for Expeditors and nor did she supervise contracts with the cleaning company. In dismissing Expeditor’s claim, Nicholas AJ held “it is reasonable to conclude that, but for the very fact of kinship, there was nothing to suggest (Ms Ma) had a personal interest, direct or indirect, in authorising the invoices.” Expeditors’ cross-claim was therefore dismissed.

Key points for employers:

  • Check your employment contracts and ensure they contain express notice of termination provisions. There is potential for senior employees with high-level responsibilities to be awarded substantial payments reflecting a failure to provide them with reasonable notice of termination. This is especially the case where the employee has been employed for a substantial period of time and can demonstrate they have performed well and diligently. Although in this case the obligation to pay reasonable notice arose because there was no express right of termination, the obligation will also arise when the contract of employment no longer represents the employee’s employment. For example, if the employee has been promoted but the contract has not been updated to reflect the promotion.
  • In another recent decision – District Council of Barunga West v Hand [2014] SASCFC 90 (6 August 2014) – an executive employee succeeded in establishing a claim for 12 months’ reasonable notice. The Full Court of the South Australian Supreme Court rejected the employer’s argument that the employee was only entitled to five weeks’ notice as per the relevant state award.

Find a Member

View or print a complete ELA member list »

Client Successes

Altra Industrial Motion Inc.

Altra Industrial Motion Inc. has multiple locations in the U.S., as well as Central America, Europe, and Asia. The Employment Law Alliance has proved to be a great asset in assisting us in dealing with employment issues and matters in such diverse venues as Mexico, Australia, and Spain. We have obtained excellent results using the ELA network for matters ranging from a multi-state review of employment policies to assisting with individual employment issues in a variety of foreign jurisdictions.

In one instance, we were faced with an employment dispute with a former associate in Mexico that had the potential for substantial economic exposure. The matter had been pending for over a year, and we were not confident in the employment advice we had been receiving. I obtained a referral to the ELA counsel in Mexico, who was able to obtain a favorable resolution of the dispute in only a few days. Based on our experiences with the ELA, we would not hesitate to use its many resources for future employment law needs.

American University in Bulgaria

In my career I have been a practicing attorney, counsel to the Governor of Maine, and CEO of a major public utility. I have worked with many lawyers in many settings. When the American University in Bulgaria needed help with employment litigation in federal court in Syracuse, New York, we turned to Pierce Atwood, the ELA member we knew and trusted in Maine, for a referral. We were extremely pleased with the responsiveness and high quality of service we received from Bond Schoeneck & King, the ELA's firm in upstate New York. I would not hesitate to recommend the ELA to any employer.

David T. Flanagan
Member of Board of Trustees 

Arcata Associates

I really enjoyed the Conducting an Effective Internal Investigation in the United States webinar.  We are in the midst of a rather delicate employee relations issue in California right now and the discussion helped me tremendously.  It also reinforced things that you tend to forget if you don't do these investigations frequently.  So, many, many thanks to the Employment Law Alliance for putting that webinar together.  It was extremely beneficial.

Lynn Clayton
Vice President, Human Resources

Barrett Business Services, Inc.

I recently participated in the ELA-sponsored webinar on the Employee Free Choice Act.  I was most impressed with that presentation.  It was extremely helpful and very worthwhile.  I have also been utilizing the ELA's online Global Employer Handbook.  This compliance tool is absolutely terrific. 

I am familiar with several other products that purport to provide up-to- date employment law information and I believe that this resource is superior to other similar compliance manuals.  I am delighted that the ELA provides this free to its members' clients.

Boyd Coffee Company

Employment Law Alliance (ELA) has provided Boyd Coffee Company with a highly valued connection to resources, important information and learning. With complex operations and employees working in approximately 20 states, we are continually striving to keep abreast of specific state laws, many of which vary from state to state. We have participated in the ELA web seminars and have found the content very useful. We appreciate the ease, cost effectiveness and quality of the content and presenters offered by these web seminars.  The Global Employer Handbook has provided our company with a very helpful overview of legal issues in the various states in which we operate, and the network of attorneys has helped us manage issues that have arisen in states other than where our Roastery and corporate headquarters are located in Portland, Oregon.

Capgemini Outsourcing Services GmbH

As an international operating outsourcing and consulting supplier Capgemini has used firms of the Employment Law Alliance in Central Europe. We were always highly satisfied with the quality of employment law advice and the responsiveness. I can really recommend the ELA lawyers.

Hirschfeld Kraemer

Stephen HirschfeldAs an employment lawyer based in San Francisco, I work closely with high tech clients with operations around the globe. Last year, one of my clients needed to implement a workforce reduction in a dozen countries simultaneously. And they gave me 48 hours to accomplish this. I don't know how I could have pulled this off without the resources of the ELA. I don't know of any single law firm that could have made this happen. My client received all of the help they needed in a timely fashion and on a cost effective basis.

Stephen J. Hirschfeld

Hollywood Entertainment Corporation

As the Vice President for Litigation & Associate General Counsel for my company, I need to ensure that we have a team of top-notch employment lawyers in place in every jurisdiction where we do business. And I want to be confident that those lawyers know our business so they don't have to reinvent the wheel when a new legal matter arises. With more than 3400 stores and 35,000 employees operating in all 50 U.S. states and across Canada, we rely on the ELA to partner with us to help accomplish our objectives. I have been delighted with the consistent high quality of the work performed by ELA lawyers. I encourage other in-house counsel to use their services, as well.

Ingram Micro

Ingram Micro is the world's largest technology distributor, providing sales, marketing, and logistics services for the IT industry around the globe. With over 13,000 employees working throughout the U.S. and in 35 international countries, we need employment lawyers who we can count on to ensure global legal compliance. Our experience with many multi-state and multi-national law firms is that their employment law services are not always a high priority for them, and many do not have experts in many of their offices. The ELA has assembled an excellent team of highly skilled employment lawyers, wherever and whenever I need them, and they have proven to be an invaluable resource to our company.

Konami Gaming

Our company, Konami Gaming, Inc., is growing rapidly in a very diverse and highly regulated industry. We are aggressively entering new markets outside the domestic U.S., including Canada and South America. I have had the recent opportunity to utilize the services provided by the ELA. The legal advice was both responsive and professional. Most of all, the entire process was seamless since our Nevada attorney coordinated the services and legal advice requested. I look forward to working with the ELA in the future, as it serves as a great resource to the legal community.

Jennifer Martinez
Vice President, Human Resources

Nikkiso Cryo, Inc.

Until recently, I was unaware of the ELA's existence. We have subsidiaries and affiliates throughout the United States, as well as in Asia, the Middle East and Europe. When a recent legal issue arose in Texas, our long-time Nevada counsel, who is a member of the ELA, suggested that this matter be handled by his ELA colleague in Dallas. We are very pleased with the quality and timeliness of services provided by that firm, and we are excited to now have the ELA as an important asset to help us address employment law issues worldwide.

Palm, Inc.

The ELA network has been immensely important to our company in helping us address an array of human resources challenges around the world. I strongly encourage H.R. executives who have employees located in many different jurisdictions to utilize the ELA's unparalleled expertise and geographic coverage.

Stacy Murphy
Former Senior Director of Human Resources

Rich Products

As the General Counsel for a company with 6,500 employees operating across the U.S. and in eight countries, it is critical that I have top quality lawyers on the ground where we do business. The ELA is an indispensable resource. It has taken the guesswork out of finding the best employment counsel wherever we have a problem.

Jill K. Bond
Senior Vice President/General Counsel, Shared Services and Benefits

Ricoh Americas Corporation

We have direct sales and service offices all over the U.S., but have not necessarily had the need in the past for assistance with legal work in every state where we have a business presence. From time to time, we suddenly find ourselves facing a legal issue in a state where we have no outside counsel relationship. It has been a real benefit to know that the ELA has assembled such an impressive team of experts throughout the U.S. and overseas.

A few years ago, we faced a very tough discrimination lawsuit in Mississippi. We had never had to retain a lawyer there before. I was absolutely delighted with the Mississippi ELA firm. We received an excellent result. They will no doubt handle all of our employment law matters in Mississippi in the future. I have also obtained the assistance of several other ELA firms around the U.S. and have received the same outstanding service. The ELA is a tremendous resource for our company.

Roberts-Gordon LLC

Our affiliated companies have used the Employment Law Alliance in connection with numerous acquisitions, and have always been extremely pleased with our ability to obtain the highest quality legal advice on due diligence issues from jurisdiction to jurisdiction. We have found the Employment Law Alliance firms to be not only first rate with respect to their legal advice but also responsive and timely in assisting us with federal and state law issues critical to our due diligence efforts. We consider the Employment Law Alliance to be an important part of our team.

Rockwell Collins, Inc.

We have partnered with many ELA firms on the development and execution of case management strategies with very positive results. We have been very pleased with the legal advice and counsel provided by the law firms we have utilized who are affiliated with the Employment Law Alliance. The ELA firms we have worked with are customer focused, responsive, and thorough in their approach to handling labor and employment law matters.

Elizabeth Daly
Assistant General Counsel


Sanmina-SCI has facilities strategically located in key regions throughout the world. Our customers expect that we will provide them with the highest quality and most sophisticated services in the marketplace. We have that same expectation for the lawyers with whom we do business. With operations in 17 countries, we need to be certain that we have a team of lawyers working together to address our employment law needs worldwide. The ELA has delivered exactly what it promised-- seamless and consistent high quality services delivered in each locale around the globe. It has quickly become a key asset for our human resources department.


We own, manage, and franchise hotels throughout the U.S. and in more than 90 countries. With more than 145,000 employees worldwide, ensuring that we comply with the complex web of local labor and employment laws in every one of these jurisdictions is a daunting task. The Employment Law Alliance has served as an important resource for us and we have benefited greatly from its expertise and long reach. When a legal dispute or issue has arisen in some far-flung place, Employment Law Alliance lawyers have always provided responsive, practical, and cost-effective assistance.

Wilmington Trust Corporation

Wilmington Trust has used the ELA to locate firms in California, Washington State, Georgia, and Europe. Our experience with the ELA lawyers with whom we have worked has always been one of complete satisfaction and prompt, practical advice.

Michael A. DiGregorio
General Counsel