The Full Bench of the Fair Work Commission (FWC) ruled in January 2017 that the abandonment of employment clauses in six modern awards are not terms which are permitted or required to be included in modern awards under the Fair Work Act 2009 (Cth) (Act) and must be removed.
The Full Bench's decision was handed down as part of the FWC's four yearly review of modern awards. This occurred after the Bench was asked by the President of the FWC last year to review the clauses in the wake of the Full Bench's decision in Boguslaw Bienias v Iplex Pipelines Australia Pty Ltd [2017] FWCFB 38 (Iplex) that the abandonment of employment clause in the Manufacturing Award has no effect if it is read as effecting an automatic termination of employment.
In Iplex, an employee had been dismissed for allegedly abandoning his employment when he failed to show up to work for a fortnight without the consent of his employer. At first instance, Senior Deputy President O'Callaghan held that the employee's actions in failing to attend for work for 14 days meant that he was presumed, according to the Manufacturing Award, to have abandoned his employment. This meant that the employer's actions in subsequently writing to the employee to confirm the termination of employment was no more than an acknowledgement of his abandonment of employment.
However, on appeal, the Full Bench held that the fact an employee may be deemed to have abandoned their employment because they have been absent without their employer's knowledge or consent for a specified period of time under a modern award clause, does not bring the employee's employment to an automatic end. Rather, the employer must take the additional step of terminating the employment, otherwise the employment will continue. The Full Bench in Iplex also held that if the abandonment of employment clause in the Manufacturing Award is interpreted as effecting an automatic termination of employment, it is of no effect.
Following its review of the abandonment of employment clauses in the six modern awards as part of the four yearly review, the Full Bench agreed with the approach taken in Iplex, ruling that these clauses are not permitted or required to be included in modern awards and must be removed. In doing so the Full Bench held that all these clauses seek to achieve is to "establish a minimal process by which an employer may proceed to dismiss an employee in response to an absence from work without consent."
However, the Full Bench stated that there would be utility in the above modern awards including a provision which identifies the procedures to be followed in the event that there is an extended and unexplained absence from duty on the part of an employee (for example, the steps the employer might take to consult with the employee regarding their whereabouts before taking any action against them). Interested parties have accordingly now been given an opportunity to present proposals for such a replacement clause.
Lessons for employers
Clauses that deem when an employee has abandoned employment are not uncommon in industrial instruments and have been considered by the FWC and its predecessors in a number of earlier decisions. However, the Full Bench's recent decision as part of the four yearly review of modern awards has confirmed the FWC's view as to how such clauses should be interpreted.
In essence, the decision confirms that when abandonment of employment occurs as contemplated by an applicable award or agreement (i.e. an employee is deemed to have abandoned their employment in accordance with an award or agreement provision), the employment will not automatically come to an end. Rather, the employer will have to take some further action to bring about the termination of the employment. This means that it is not the deeming of the unauthorised absence as an abandonment which causes the employment to terminate, but rather the act of the employer.
The obvious risk of the above is the potential exposure of employers to an unfair dismissal claim arising out of the termination due to the employee's abandonment. For this reason, employers should take all reasonable steps in attempting to contact the absent employee to ascertain their whereabouts before proceeding to terminate their employment on the basis of abandonment, and when in doubt, seek advice.
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