Relying on Fair Work minimum notice periods might not be enough

In a recent Federal Court decision Cropper v Energy Action (Australia) Pty Ltd [2025] FCA 663 the Court ruled that an employer could not rely solely on the minimum notice period under the Fair Work Act to terminate an employee.

🔍 Instead, it found that in the absence of a valid termination clause, the contract must include an implied ‘reasonable notice’ period, which in this case was three months even though the employer had argued for just five weeks.

👉 Here’s why these matters:
✅ Section 117 of the Fair Work Act sets minimum notice but it doesn’t give the right to terminate. That right must come from your contract (express or implied).
✅ Without a written contract or up-to-date termination clause, you may owe significantly more notice than you expect.
✅ Independent contractors misclassified as employees also carry major risk particularly now that the Fair Work Act requires employers to look at the actual nature of the relationship, not just what’s written on paper.

📌 Track HR’s Tips for Employers:
Ensure all employees have a written contract with a clear and valid termination clause.
Review contracts regularly, especially when roles or seniority change.
Audit contractor arrangements to make sure they reflect reality or risk paying months of ‘reasonable notice’.

Employment law evolves – your contracts should too.

📩 If you’d like help reviewing or updating your contracts, we’re here to support you.

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