Abandonment of employment does not necessarily automatically terminate an employment contract.
According to the Full Bench of the Fair Work Commission in a recent case an extra step is required by the employer, which makes it a termination at the initiative of the employer and allows the employee to bring an unfair dismissal claim.
The Fair Work Commission will be reviewing modern awards with abandonment of employment clauses. Barring any amendments following that review, we suggest that employers may be able to protect themselves in these situations by following some best practice steps set out in this article.
We are regularly asked to advise employers in relation to whether certain circumstances amount to abandonment of employment and, if so, what are the employer’s rights and obligations.
A recent Fair Work Commission decision (Mr Boguslaw Bienias v Iplex Pipelines Australia Pty Limited T/A Iplex Pipelines Australia  FWCFB 38 (13 January 2017) – “Iplex”) raises the following interesting questions about this area of law which we will explore in this article:
- Does abandonment of employment give rise to a termination of employment at the initiative of the employer, thereby giving rise to unfair dismissal rights?
- If so, does the employer have to provide and pay notice of termination?
- What can employers do to better protect themselves in abandonment situations?
The Iplex decision concerned interpretation of the abandonment of employment clause in the Manufacturing and Associated Industries and Occupations Award (“the Award”). In this matter, the employee had been absent from work for two weeks without explanation despite numerous attempts by the employer to contact him. The employer wrote to the employee stating that it had determined he had abandoned his employment and his employment was terminated with effect from his last day of work. He was paid 5 weeks’ in lieu of notice.
The employee brought unfair dismissal proceedings. The employer raised a jurisdictional argument on the basis that the termination had not occurred at the employer’s initiative and therefore was not a dismissal within the meaning of the Fair Work Act.
At first instance the employer was successful. The employee successfully appealed this decision with the Full Bench finding that the abandonment of employment clause in the Award did not have the effect of automatically terminating the employment. Because the employer was required to take the additional step of ending the employment relationship this was a dismissal at the initiative of the employer. The Full Bench quashed the initial decision of Senior Deputy President O’Callaghan and remitted it to him for further hearing and determination.
FWC President Iain Ross has asked the same Full Bench to review the abandonment of employment clauses in the six modern awards that contain these clauses. These awards are the Manufacturing and Associated Industries and Occupations Award, Business Equipment Award, Contract Call Centres Award, Graphic Arts, Printing and Publishing Award, Nursery Award and the Wool Storage, Sampling and Testing Award.
The terms of the review have not yet been released.
As a result of this decision, as it currently stands, the answers to the above questions are:
1. Does abandonment of employment give rise to a termination of employment at the initiative of the employer thereby giving rise to unfair dismissal rights?
Answer: yes, if the employee is covered by one of the modern awards containing an abandonment of employment clause. If not, then it would depend on the wording of any contract or policy dealing with abandonment. In our view such terms can be drafted in such a way as to make it clear that in circumstances where an employee is absent from work for a certain period of time without explanation and attempts to make contact with the employee have been unsuccessful the employee will be taken to have resigned from their employment with effect from the last date of attendance at work, or last authorised absence, whichever occurred last.
In our view even though a letter should still be written to the employee confirming the abandonment and, in effect accepting the deemed resignation, this should not be regarded as a termination at the initiative of the employer. However, it will be interesting to see what the Full Bench decides in its review to see if this can be confirmed.
2. If so, does the employer have to provide and pay notice of termination?
Answer: yes, if it is regarded as a termination of employment at the employer’s initiative by virtue of the notice provisions in the Fair Work Act. But if the employee is deemed to have resigned and is not, by virtue of their abandonment, prepared to work out the notice period then, in our view no payment in lieu of notice is required.
3. What can employers do to better protect themselves in abandonment situations?
Answer: we recommend that employers that want to allege abandonment of employment, whether they are covered by one of the above awards or not, should follow these steps:
- make sure that their employees are fully aware of the employer’s policy and requirements in relation to reporting and providing evidence in support of absences. If the employer is not covered by a modern award or enterprise agreement that contains an abandonment of employment clause then include in their policies a policy and procedure dealing with abandonment. This policy should make it clear that if an employee fails to attend work for a certain period without explanation they will be regarded as having resigned from their employment with effect from the last date of attendance at work, or last authorised absence, whichever occurred last;
- provide a warning if employees fail to comply with the requirements for reporting absences and make it clear that further non compliance may result in further disciplinary action being taken up to and including termination of employment;
- if an employee is absent without explanation attempts should be made to contact the employee to check on their wellbeing and to try to obtain an explanation for the absence – such attempts should include phone calls, delivery of letters by express post and/or courier, contacting next of kin and/or arranging for Police to conduct a welfare check;
- if attempts to contact the employee are unsuccessful then the employee should be informed that they are considered to have abandoned their employment and their employment is terminated (by way of resignation if not covered by one of the modern awards).
As the law currently stands, if an employer follows these steps then even if the termination is regarded to be at the initiative of the employer and an unfair dismissal claim is brought the employer should be able to successfully defend such a claim on the basis that there was a valid reason for termination and procedural fairness was afforded. It will be interesting to see what happens in Mr Bienias’ case!!
Clearly each case needs to be assessed on its merits and if you require any assistance in drafting policies dealing with abandonment or how to deal with a particular potential abandonment situation we would be more than happy to assist.
Post by Sarah Jones