When employers move on an executive termination, the legal risk is not always where they expect it to be.
An employer may successfully defend a general protections claim and still face a significant damages award for breach of contract. In a recent Federal Circuit and Family Court decision, Lord v Toll Transport Pty Ltd [2026] FedCFamC2G 348, the Court dismissed the former executive’s adverse action claims, but ordered Toll to pay $176,250 plus interest for failing to give Mr Lord what the Court found was 12 months’ reasonable notice of termination.
The lesson of this decision for employers, business owners, decision-makers and senior executives, is even when the reason for termination of employment survives scrutiny under the Fair Work Act 2009 (Cth), employees may still seek redress for breach of the contract of employment.
Background
The employee, Rodney Lord, had worked within the Toll Group for about 34 years and, at the time of termination, held the role of General Manager Queensland. His annual salary was about $235,000. On 9 March 2021, Toll terminated his employment and gave him 3 months’ notice. He was also offered an ex-gratia payment of $58,750 on condition he signed a deed of release, which he declined.
Lord alleged that Toll terminated his employment because he had made complaints about bullying by a former executive, and that this amounted to unlawful adverse action in breach of the general protection provisions of the Fair Work Act. Toll’s defence was the business was heading in a new direction, needed new leadership, and was under serious financial pressure.
What the Court decided
1. Toll sucessfully defended the general protections claim
The Court accepted the fact Lord had exercised a workplace right by making complaints about bullying. However, the mere fact of the complaint was not enough. The real issue was the reason the decision-maker terminated the employment. The Court found that the relevant decision-maker was Mr Rugendyke, Executive General Manager of Toll Palletised Express. The Court accepted his evidence that he terminated Lord’s employment because the business needed a different leadership approach as part of a turnaround strategy, not because Lord had made complaints.
The Court also found that Mr Beacham, Rugendyke’s superior, had effectively given Rugendyke broad authority to make leadership decisions and had rubber-stamped the outcome, but that did not alter the result. The Court was satisfied the respondents had discharged the reverse onus under section 361 of the Fair Work Act. Lord’s general protections claims were dismissed.
2. Toll failed on notice
That was not the end of the case. Contract law provided an additional cause of action for Mr Lord
The written employment contract’s termination clause stated that either party could terminate employment by giving “months’ written notice”, but the number of months had not been specified. The Court held Toll could not unilaterally treat the clause as permitting only 3 months’ notice. Instead, it implied a term requiring reasonable notice.
On the facts, the Court found 12 months’ notice was reasonable. Important factors included:
- Lord’s 34 years of service
- his senior role
- his clean record and loyalty
- the absence of misconduct, gross negligence or insubordination
- his age, being 59 at the time of termination
- his limited prospects of finding equivalent senior employment on equivalent pay.
The Court noted that Lord did secure new employment about 4.5 months after termination, but in a less senior role and on a much lower salary, starting at about $139,726. That did not displace the conclusion that 12 months’ notice was reasonable. Toll was ordered to pay $176,250 plus interest.
Why this matters for employers
This is a useful case for three reasons.
First, it reinforces that general protection claims still turn on the evidence about the actual reason for the decision. Employers who can point to a credible decision-maker, supported by coherent evidence about business reasons, may be able to discharge the statutory onus.
Second, it shows that senior executive exits should not be approached only through a Fair Work lens. Contract risk matters. If a notice clause is unclear, incomplete or poorly drafted, a court may imply a term of reasonable notice and assess that objectively at the time of termination. For long-serving senior employees, that period can be substantial.
Third, it is a reminder that long service, seniority, remuneration level and age still matter when notice is assessed. Employers should be cautious about assuming that a short notice period will hold where the contract drafting is weak.
Employer takeaway
For senior employee exits, the reason for termination is only part of the risk.
The contract matters just as much. If the notice clause is unclear or incomplete, a court may imply reasonable notice, and the cost can be substantial.
Employers should review both Fair Work risk and contract risk before any termination decision is implemented.
A defensible termination process is not only about unlawful reason claims. It is also about getting the contract right.
Final word
Lord v Toll Transport Pty Ltd is a strong example of a mixed outcome. The employer defeated the general protections case but still paid a significant sum because the notice position was not properly secured.
For employers and senior decision-makers, the point is clear. In senior employee exits, legal risk lies not only in why the employment ends, but also in how the termination is carried out.
Maguire Legal advises employers on executive exits, contract drafting, general protections risk and termination strategy. If your organisation is considering a senior termination, contact us before steps are taken.