Four decades of service ends in dispute over leave entitlements
The Fair Work Commission (FWC) recently dealt with an unfair dismissal case where a worker's carefully planned retirement transition was disputed after nearly four decades of service.
The worker argued that his employer's last-minute policy revelation about long service leave altered his retirement plans and effectively ended his employment without his agreement.
The case raised important questions about managing retirement transitions, communication of workplace policies, and the balance between worker expectations and employer prerogatives, particularly when long-term employees plan their departure.
A business manager had dedicated almost 37 years to a global asset care company, SRG Global Asset Care Pty Ltd. Starting in February 2022, he began informing colleagues about his intention to retire in 2024, having thoughtfully planned his departure well in advance.
Throughout the first half of 2023, he engaged in several discussions with his manager about leaving work in July 2024. During a meeting on 6 August 2023, he confirmed his retirement timeline, making it contingent on finding and training his replacement.
From the beginning, the worker consistently emphasised his intention to take his accrued long service leave after finishing work, which would effectively extend his employment period beyond his last working day.
In early 2024, the worker actively participated in recruiting his replacement, attending candidate interviews on 16 April 2024. During these interviews, he discussed his planned work end date of 5 July 2024 and stressed the importance of a proper handover period.
On 13 May 2024, following the successful recruitment of his replacement, the worker submitted a formal long service leave application for the period from 8 July 2024 to 13 January 2025. However, his manager informed him that taking long service leave into retirement was "against company policy."
The manager proposed an alternative: the worker could finish on 5 July 2024 with an "official retirement date" of 29 July 2024. This unexpected development led to the worker expressing his disappointment about being denied the additional financial benefits he would have accrued during his planned leave period.
Despite ongoing disagreement about the long service leave arrangement, the employer proceeded with farewell events, including a dinner on 4 July 2024 and a send-off on 5 July 2024. The worker sent a farewell email to staff on 10 July 2024.
The employer later offered a "goodwill payment" of five weeks' salary, approximately $16,500 gross, without conditions. However, the worker maintained this amount fell short of what he would have earned during his planned long service leave period, including over $5,000 in superannuation contributions.
The dispute centred on whether the worker had resigned or been dismissed. While he had clearly communicated his intention to leave, the Commission found that the employer's decision to end the employment on 5 July 2024 constituted a dismissal since the worker never agreed to this arrangement.
The Commission found that while the employer had the right under the Long Service Leave Act 1955 (NSW) to refuse the leave request, their failure to communicate this policy earlier made the dismissal unfair.
The Commission noted: "[The worker] proceeded on the premise that he would be permitted to take long service leave into retirement... [The employer] had ample opportunity to tell [the worker] that the premise was a false one."
Despite finding the dismissal unfair, the Commission decided against ordering any remedy. It acknowledged that even if the employer had informed the worker earlier about their position on taking long service leave into retirement, there was no guarantee they would have approved the leave request.
The Commission also considered the significant "goodwill payment" made by the employer, which exceeded the worker's strict entitlements, in deciding not to award additional compensation.
