Abandonment of Employment clause ineffective

07 February 2017

A recent decision of a Full Bench of the Fair Work Commission (FWC) has examined the operation of the Abandonment of Employment clause in the Manufacturing (etc) Award (Bienias v Iplex Pipelines Australia Pty Ltd [2017] FWCFB 38).

Facts

The employee had had a series of absences for which he had not complied with the relevant notification requirements. Following a disciplinary meeting on 11 May 2016, the employee did not attend for work, did not notify the employer, did not respond to telephone calls from the employer and did not respond to a letter delivered to his home on 23 May requesting him to contact the employer urgently.

On 30 May 2016, the employer wrote to the employee advising him that it had determined he had abandoned his employment from his last day of attendance, and paid him 5 weeks in lieu of notice.

Decision at first instance

SDP O’Callaghan examined clause 21 of the Manufacturing (etc) Award which deals with abandonment of employment. In essence the clause states 3 days absence without consent is prima facie abandonment of employment, 14 days without notification and the employee is deemed to have abandoned their employment, and the termination of employment operates from the last day of attendance at work.

The SDP effectively ruled that the clause has the effect that the employment ends as a result of the abandonment and that therefore there is no termination at the initiative of the employer. The clause is absolute in its terms and it does not require the employer to take any particular step to accept the employee’s repudiation of the employment relationship. Consequently, the employee could not pursue his unfair dismissal claim.

Appeal decision

The employee appealed the decision to a Full Bench of FWC.

At common law, it is generally accepted that abandonment of employment does require an employer to take action to accept the employee’s repudiation of the employment. However, the Award clauses appeared to make the abandonment an automatic termination of employment by the employee (and not a termination at the employer’s initiative).

In what could be regarded as a strained construction of the otherwise clear words of the Award clause, the Full Bench held that clause 21 does not have the effect of automatically terminating the employment. The Full Bench said “…., that an employee is deemed to have abandoned his employment within the meaning of the clause does not mean that the employee’s employment is thereby at an end.” The Full Bench also said that the provision which states quite clearly that the termination of employment operates from the last day of attendance does not operate until the employer takes the action of concluding that it is not satisfied the employee was absent for a reasonable cause, and decides to act.

While this aspect of the decision renders the abandonment clauses in Awards of little practical effect, the final passages of the decision go further and render such clauses of no effect at all.

This is because the Full Bench also held the abandonment clause is neither a required, nor a permitted term in awards. As such, under the Fair Work Act, the entire clause is of no effect.

President Ross has now referred the general issue of the validity of abandonment of employment clauses in modern awards to the same Full Bench.

Abandonment of employment clauses appear in the following awards:

  • Manufacturing and Associated Industries and Occupations Award
  • Business Equipment Award
  • Contract Call Centres Award
  • Graphic Arts, Printing and Publishing Award
  • Nursery Award
  • Wool Storage, Sampling and Testing Award.

No date has been set for any Full Bench proceedings at this time.

Regardless of the outcome of this process, where an employee fails to attend work or fails to return from approved leave and does not contact the employer, we recommend you take active steps (documented in writing) to contact the employee to ascertain whether they have a satisfactory explanation for their absence. Care should then be taken, before making a decision to accept the repudiation by the employee or to terminate employment, to minimise the risk of a successful unfair dismissal claim.

If you would like advice or assistance with any abandonment of employment issues, please contact a member of our Workplace Relations team.

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