By Jennifer Wyborn (Partner) and Charisse Matthews (Lawyer) of Clayton Utz, 8 August 2019.
Abandonment of employment is a complicated and risky area, and employers should not lightly conclude that it has happened, especially if there is any indication the employee intends to return.
It is a busy Monday morning and your senior administrator has not shown up for work. Nor does he show up for the rest of the week. Calls are going straight to voicemail and his next of kin is also not answering the phone. What should an employer do? And how long before it can be assumed he is not coming back?
Abandonment of employment is not an issue that arises often, but when it does it causes great stress and risk for employers. This article provides guidance on steps an employer should take when their employee is a no show.
First things first: what does your missing employee say is going on?
Before an employer should consider whether their employee has abandoned their employment, they need to attempt to contact the employee. A simple call along the lines of “Hey mate, are you ok? When will you be back at work?” can prevent a lot of stress and a successful legal claim by the employee down the track.
This point has been reiterated by the Fair Work Commission a number of times. The Full Bench has stated that “an employer will normally be expected to have attempted to contact the employee to ask why they have been absent” (4 yearly review of modern awards – Abandonment of Employment  FWCFB 139).
The consequences of not picking up the phone can be serious, as a recent case in the Fair Work Commission shows.
In that case, Mr Thompson has been assured by his manager that he would no longer have to work with a particular colleague; when he came into contact with that colleague, he left the workplace. Mr Thompson obtained a medical certificate and lodged a workers’ compensation claim (the employer claimed it did not receive copies of these). Three days later, on the basis that the employer had not heard from Mr Thompson, it revoked its nomination for Mr Thompson’s visa, which effectively terminated his employment.
The Fair Work Commission held that the employer needed to have attempted to contact Mr Thompson before it could legitimately conclude he had abandoned his employment. If it had contacted Mr Thompson, it would have discovered that Mr Thompson was anxious and upset about what had occurred at work and had obtained a medical certificate for his absence from work. It found that Mr Thompson was unfairly dismissed (Orry Thompson v Zadlea Pty Ltd T/A Atlas Steel  FWC 1687).
How long is long enough?
There is no set period of time that an employer must wait before they can assume an employee has abandoned their employment.
Clauses in modern awards previously required a period of at least three days’ unexplained absence before there was prima facie evidence an employee had abandoned their employment. There are no longer any abandonment of employment clauses in the modern awards, as the Fair Work Commission considered they were not necessary to meet the modern awards objective.
Generally, we think there would be significant risk in making any assumptions about abandonment before at least three days had passed. Depending on the circumstances, a longer period may be required. In determining the appropriate length of time an employer must wait, it would be reasonable to consider:
- the employee’s circumstances immediately before the unexplained absence;
- any physical or mental health concerns for the employee;
- previous work behaviour and absences; and
- any contact with the employee.
The length of time required may also be set out in an enterprise agreement, employment contract or workplace policies.
OK, they’re not coming back
Once a reasonable period of time has passed and an employer can reasonably assume the employee is not coming back, there are a number of options available to an employer. Which option is appropriate will depend on the relevant employment instruments and the facts of the matter.
Treat the absence as serious misconduct
The employer may be able to treat the absence as serious misconduct, depending on the relevant employment instruments, and follow the steps in its misconduct procedures.
For example, the Fair Work Regulations 2009 defines serious misconduct as including “wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment”. Abandonment of employment will generally satisfy this.
However, there is likely to be little benefit in pursuing a misconduct process where an employee is not engaging with the employer. It also raises issues about whether the absence is serious misconduct and whether it justifies a decision to terminate employment.
Take action in accordance with the enterprise agreement or employment contract
Some enterprise agreements and employment contracts include abandonment of employment clauses which set out the required steps. You might also have workplace policies which cover this.
Terminate the employment contract on the basis of repudiation
Repudiation occurs where a party to a contract (including an employment contract) indicates:
- that they are unwilling or unable to perform their obligations under a contract;
- an intention to no longer be bound by the contract; or
- an intention to fulfil it only in a manner substantially inconsistent with the party’s obligations.
Repudiation may include a breach of an essential term or a series of relatively minor breaches. Where one party repudiates a contract, the other party has a common law right to terminate the contract.
Abandonment of employment is a form of repudiation. In its four yearly review of modern awards, the Full Bench said that the test:
“is whether the employee’s conduct is such as to convey to a reasonable person in the situation of the employer a renunciation of the employment contract as a whole or the employee’s fundamental obligations under it.”
As it is the employee who has repudiated the contract, which the employer has accepted, courts have generally considered that termination of the employment contract is at the employee’s initiative. The Full Bench in its review of modern awards also considered this was the case, and noted that an unfair dismissal application may be struck out on the grounds that there was no dismissal as the termination of the employment contract was not at the initiative of the employer.
Courts have taken the view that common law repudiation is almost always available, even where employment contracts or industrial instruments set out termination procedures. It will generally only be excluded where there is extensive statute regulating the employment relationship or where there is clear language excluding it in the employment contract.
When there’s possible abandonment of employment, tread very cautiously
Abandonment of employment is a complicated and risky area, and employers should not lightly conclude that it has happened, especially if there is any indication the employee intends to return. Employers should, at a minimum, try to make contact with the employee. If an employer can reasonably assume an employee has abandoned their employment, there are a number of steps it can take. Which steps are appropriate will depend on the circumstances.
Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.
This article was first published on the Clayton Utz website and has been reproduced with permission.