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Adverse Action Claim Fails… But Employer Still Pays $176,000: Here’s Why

Adverse Action Claim Fails But Employer Still Pays $176,250: The Notice Period Trap

An Employer successfully defends a general protections claim…
and still ended up paying $176,250?

Why? What happened?

The Federal Circuit and Family Court decision in Lord v Toll Transport Pty Ltd [2026] FedCFamC2G 348 (11 March 2026) is an interesting case and it came down to a contractual error.

Because while the employer successfully defended a general protections (adverse action) claim, it still walked away with a $176,250 liability.

Not for why the employee was terminated.

The facts in brief

Mr Lord was a long-serving senior executive, with around 34 years of service within the Toll Group, ultimately holding the role of General Manager, Queensland.

His employment was terminated in March 2021 with 3 months’ notice.

He brought a claim alleging:

  • He had made complaints about workplace bullying
  • Those complaints were a workplace right under the Fair Work Act 2009 (Cth)
  • His termination was adverse action taken because of those complaints

At the same time, he also pursued a breach of contract claim in relation to his notice period.

The adverse action claim failed

The Court accepted that:

✔️ Mr Lord had made complaints (and therefore exercised a workplace right)
✔️ The reverse onus applied under section 361 of the Fair Work Act

But critically:

❌ The employer was able to prove the termination was not because of those complaints.

Instead, the Court accepted the evidence of the decision-maker that:

  • The business was under significant financial pressure
  • There was a need for new leadership and direction
  • The decision was part of a broader leadership restructure

Importantly, the Court found the decision maker’s evidence was:

“clear, concise and plausible”

In general protections claims, everything turns on why the decision was made and the decision makers mind.

And here, the employer successfully discharged the reverse onus.

However…

Despite successfully defending the adverse action claim…

The employer still lost.

Why?

Because of the notice period.

The $176,250 problem: reasonable notice

The employment contract allowed termination with notice.  Which of course is quite normal.

But there was a fatal issue:

The contract did not specify the length of notice.

The contract which had been signed in 2018 contained a notice clause that said both parties could terminate the employment “by giving ___ months’ written notice”.

The specifics of the notice period were left blank.

So what happens in that situation?

The Court steps in and implies a term of Reasonable Notice

And in this case, the Court found:

  • 3 months’ notice was inadequate
  • 12 months’ notice was reasonable

Given:

  • The employee’s 34 years of service
  • His senior executive position
  • His age (63 at the time)
  • His remuneration (around $235,000 per annum)

The result:

👉 $176,250 in damages, plus interest

Why this case matters (especially for HR and Employers)

There are two very different lessons coming out of this decision.

  1. General protections claims are defensible… but only with evidence of the decision makers mind

The employer succeeded because:

  • The decision-maker gave direct evidence
  • That evidence was accepted as credible
  • The reasons were commercial, not personal

The Court is looking for:

✔️ Evidence of actual reasoning at the time
✔️ A clear decision-making pathway
✔️ Consistency between documents, conduct and testimony

  1. Contract basics still matter (a lot)

This is the bigger takeaway.

Employers often focus heavily on:

  • Investigations
  • Procedural fairness
  • Legal risk under the Fair Work Act

Which is absolutely fair enough, but overlook something far more basic:

What does the contract actually say?

Because if it is silent or poorly drafted:

The Court will fill the gap.

And when it does, it will look at:

  • Seniority
  • Length of service
  • Age and employability
  • Industry norms

Which, for senior executives, can quickly mean:

6 to 12, even 24 months’ notice (or more)

Our Employment Lawyers at South Geldard Lawyers have essential expertise in preventing these issues occurring in the first place and helping with the legal issues when they do occur. Feel free to reach out on (07) 4936 9100 or via email to Jonathan Mamaril, Director at jmamaril@southgeldard.com.au.  All Employers receive an obligation free consultation.