Courts are increasingly awarding compensation to senior executives claiming that they have been unfairly or unreasonably terminated, Harmers Workplace Lawyers senior associate Bronwyn Maynard said.
"Increasingly we are seeing senior executives who feel their positions have been unfairly terminated challenging these actions," she said.
"This is especially the case when an executive believes his or her reputation has been tarnished by implication of non-performance or wrongdoing."
Implied terms of employment were receiving greater recognition in termination claims, Maynard said.
"A number of recent decisions of Australian courts have recognised implied terms in employment contracts, including the implied term of mutual trust and confidence, and found that the company's actions have been in breach of those terms," she said.
"While companies need to have a level of trust and confidence in the executives they employ to run their companies, this relationship is reciprocal."
Contracts should be right from the start, Maynard said.
She said they should address not only the provisions for termination but also aspects of the notice period such as payment in lieu of notice, "garden leave" and assistance during the notice period.
"It is also important to continually review and update employment contracts, especially when promoting an employee, or if conditions of employment and/or workplace policies change."
