Abandonment Clauses in Modern Awards
Six Modern Awards have Abandonment Clauses being the
- Business Equipment Award 2010;
- Contract Call Centres Award 2010;
- Graphic Arts, Printing and Publishing Award 2010;
- Manufacturing and Associated Industries and Occupations Award 2010;
- Nursery Award 2010 and
- Wool Storage, Sampling and Testing Award 2010.
They also exist in some Enterprise Awards.
They deal with employees who fail to attend work for a set number of days (two or three depending on the Award) and allow the employer to determine that the employment is over.
The Full Bench of the Fair Work Commission (“FWC”) has now clarified the operation and role of Abandonment Clauses.
All Applications for Relief from alleged Unfair Dismissal, must establish that the former employee was “dismissed”. If an employer argues this is not the case, it is making a “jurisdictional objection”.
The meaning of “dismissed” is covered by s.386(1) of the Fair Work Act 2009 (Cth) (“FW Act”). It states that a person is dismissed if:
- the person’s employment … has been terminated on the employer’s initiative; or
- the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.
Section 386(2) of the FW Act states that a person is not dismissed if the employee was on a fixed term contract that had expired.
For example, if an employee resigns of their own accord or was on suspension but had not been formerly terminated, they are barred from making an Unfair Dismissal claim.
The question before the FWC in Bienias v Iplex Pipelines Australia Pty Limited T/A Iplex Pipelines Australia  FWCFB 38 (13 January 2017) turned on the issue of whether or not termination due to abandonment under an Award was at the employer’s initiative or the employee’s.
The employer (“Iplex”) is the largest Australian owned and operated pipe and fittings manufacturer in Australia, operating in all states as well as in New Zealand.
Bienias was an employee of Iplex for 32 years, having been a Team Leader since 1992.
His employment was covered by the Manufacturing and Associated Industries Occupations Award 2010 (“the Award”).
From 13 May 2016, Mr Bienias failed to attend work. Iplex made several attempts to contact him including phoning him, sending emails and letters, using couriers and even requesting a police welfare check. Throughout this time, Bienias failed to make contact with Iplex.
On 30 May, Iplex ended his employment via letter, claiming by letter that:
… we have determined that you have abandoned your employment with Iplex Pipelines and, consequently, your employment with the company is terminated with effect on 13 May 2016, being the last shift you worked for the company.
This termination appeared to have been in line with the procedure set out in Clause 21 of the Award, which provides:
- Abandonment of employment
21.1 The absence of an employee from work for a continuous period exceeding three working days without the consent of the employer and without notification to the employer is prima facie evidence that the employee has abandoned their employment.
21.2 If within a period of 14 days from their last attendance at work or the date of their last absence in respect of which notification has been given or consent has been granted an employee has not established to the satisfaction of their employer that they were absent for reasonable cause, the employee is deemed to have abandoned their employment.
21.3 Termination of employment by abandonment in accordance with clause 21—Abandonment of employment operates as from the date of the last attendance at work or the last day’s absence in respect of which consent was granted, or the date of the last absence in respect of which notification was given to the employer, whichever is the later.
Bienias files an Application alleging Unfair Dismissal, asserting that he had been dismissed contrary to s.352 FW Act, having taken a temporary absence for illness or injury. He claimed that he had been so sick that he had been unable to contact his employers.
Iplex in response stated that the termination was not at its initiative, arguing that clause 21 mandated that abandonment automatically terminated the relationship.
At first instance, Senior Deputy President O’Callaghan found for Iplex, ruling that clause 21 creates a presumption that the employee must rebut. Bienias did not succeed in making the rebuttal.
Bienias appealed the original decision to the Full Bench of the FWC.
Vice President Hatcher, Deputy President Gostencnik and Commissioner Cribb heard the appeal and found in Bienias’ favour.
The Full Bench held that the Senior Deputy President had erred in finding that clause 21 of the Award creates an obligation on the employee to rebut.
It also found against Iplex’s submission that the abandonment automatically terminated the employment relationship.
It was held, at  to , that if the clause was to automatically terminate the employment, then the employer would have no ability to approve the absence at a later date and continue the employment relationship, despite its wishes.
In order to terminate an employment relationship due to abandonment under clause 21, the Full Bench held, at , that the employer must take an “additional step”.
They found that Iplex’s letter of 30 May was evidence of this “additional step” as Iplex determined that Mr Bienias had abandoned his employment. Therefore, the termination that followed was at Iplex’s initiative.
The jurisdictional argument having failed, the matter was relisted for the hearing of the Application for alleged Unfair Dismissal.
As a result of this case, FWC President Iain Ross has asked for the Full Bench of the FWC to review all Abandonment Clauses in Modern Awards. This will provide further clarity on how to interpret them based on Iplex ruling.
Messages for Employers
This case shows that even though an employee may have abandoned their employment, the employer must still take an “additional step” to terminate the employment. This means that the termination was at the initiative of the employer, exposing them Unfair Dismissal claims.
Steps must therefore be taken to ensure employers make all reasonable attempts to contact the missing employee to ensure that they have sufficient grounds to terminate. Employers must be able to prove those steps.
Employers who are covered by the Modern Awards listed above will need to be aware of the pending review of their Award.
We advise all employers seek legal advice if they wish to allege that any employee has abandoned their employment for a number of days and it is not possible to contact them.