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Network Ten fails to prevent news presenter leaving

Excerpts from this article first published in ‘Human Resources’ Magazine, Issue 97, 7 February 2006

In hotly contested litigation, Network Ten lost its claim that Sydney news presenter, Jessica Rowe had breached her employment contract by failing to give Network Ten 26 weeks’ notice before signing up with a competitor. This case is a salient reminder to employers of the importance of concise employment contract drafting, especially termination provisions.

On 18 December 2005 Ms Rowe informed Network Ten that she was tendering her resignation and her last day of employment would be 31 December 2005. Network Ten sought to prevent Ms Rowe from commencing work with Channel Nine in January 2006 by asserting in Supreme Court proceedings that Ms Rowe had breached the requirement in her employment contract that she give 26 weeks’ notice to terminate her employment. Ms Rowe asserted that her employment contract had expired on 31 December 2005 and hence she had not been required to provide 26 weeks’ notice.

The employment contract set out Ms Rowe’s annual remuneration for the calendar years 2004 and 2005 and stated that Ms Rowe was not entitled to any other payments during her employment. It contained a termination provision requiring either party to provide 26 weeks’ notice to terminate Ms Rowe’s employment, and did not contain an express “expiry date”.

Justice Simpson rejected Network Ten’s arguments and determined that the effect of the remuneration provisions in the contract was that had Ms Rowe remained employed after 31 December 2005, she would not have been entitled to any remuneration under the contract. This conclusion persuaded Justice Simpson that the proper construction of the contract was that it was for a maximum period of 2 years, terminable earlier on the provision of 26 weeks’ notice. Accordingly, the contract expired on 31 December 2005. On 10 January 2006 a three judge bench of the NSW Court of Appeal dismissed Network Ten’s appeal.

HR Tips

• Where it is the intention that an employment contract be for an indeterminant period, but terminable on notice, the contract document should support the intention
• If an employer wishes not to lose a valuable employee without adequate notice, ensure the contract document contains provisions which provide adequate protection
• As a result of the Federal WorkChoices changes which are likely to take effect in March 2006, the precise drafting of employment contracts, and especially those for executive employees, will become of greater importance
  
  

Lucinda Frantz
Senior Associate
Australian Business Lawyers