Fair work cases, unfair dismissal and abandoning employment

There are circumstances in employment where an employer might present instructions to an employee which are unpalatable and which the employee will not accept.

When a stalemate ensues a number of legal contexts are possible, depending upon the conduct of the employee and the employer, including (but not limited to) the following.

Firstly, the employer may choose to terminate the employment on the basis the employee has

  • committed misconduct by failing to comply with a   lawful and reasonable instruction;
  • repudiated the relationship;
  • abandoned or rununciated his or her employment;
  • been frustrated by the employee and cannot continue;
  • by his or her conduct resigned.

Each of these legal and factual possibilities will of course depend upon the particular facts and each exists in a slightly different legal context particularly in the context of an unfair or unlawful (general protections) dismissal.

The following extract from an unfair dismissal decision of the Fair Work Commission illustrates the legal complexity of the various nuances.

“The principles associated with abandonment of employment are well settled, set out thus by the Full Bench in Re: Abandonment of Employment;

“[21] “Abandonment of employment” is an expression sometimes used to describe a situation where an employee ceases to attend his or her place of employment without proper excuse or explanation and thereby evinces an unwillingness or inability to substantially perform his or her obligations under the employment contract. This may be termed a renunciation of the employment contract. 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. Renunciation is a species of repudiation which entitles the employer to terminate the employment contract. Although it is the action of the employer in that situation which terminates the employment contract, the employment relationship is ended by the employee’s renunciation of the employment obligations.” 59

[47] The High Court, in Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd, noted in respect of repudiatory breaches, including those termed renunciation, that a breach triggering remedial termination may be of the whole contract or merely a part. It held that the “test is whether the conduct of one party is such as to convey to a reasonable person, in the situation of the other party, renunciation either of the contract as a whole or of a fundamental obligation under it” 60

[48] Application of the test for abandonment of employment requires an objective assessment, of “whether the employee’s conduct is such to convey to a reasonable person in the position of the employer and based on the facts as reasonably known to the employer at the time, that the employee had repudiated their duty to meet their obligations under the contract of employment”. 61

[49] In this case the Appellants nominated the MEU to be their representative which duly made various representations to OS about the accuracy of its statements including; whether OS was obliged to consult with the union and employees; whether redundancy payments were due; and whether employees should be offered jobs with Mt Arthur Coal Pty Ltd. The MEU also advised “[w]e will be advising all of our members that don’t wish to accept a role with OS in Central Queensland that they should not resign from their employment”. 62 The Appellants, with the exception of Mr Lerch, participated in the Phase 1 Conversations at which OS records each as having “indicated you did not wish to continue your role at another OS services location”.

[50] The Appellants, including Mr Lerch, also received but did not return as directed the Allocation Letters with the same correspondence asserting that OS regarded the Point of Hire Term as meaning that they may be required to work on multiple sites across the East Coast of Australia and that this was a fundamental term of their employment contract. The correspondence was in each case specific, setting out “details of the continuing work we have available for you” – in each case at Blackwater.

[51] We accept the above conduct of the Appellants as evincing their intention to not comply with the obligation under their employment contract to work at Blackwater.

[52] We accept the Deputy President as correct when he found the “choice between cessation of employment and taking up the deployment to Blackwater did not give the [Appellants] a right to reject the deployment and remain employed with OS at Mt Arthur or some other location of their choosing” and that “the allocation of Blackwater as each [Appellant’s] next deployment was an authoritative instruction. It was something which OS “required” to be done and was communicated to the [Appellants] by way of a “direction” within the meaning of the Point of Hire Term”. We accept as well that the “fact that the Allocation Letter spelt out in express terms what would happen if the [Appellants] did not agree to their deployment to Blackwater, namely the cessation of their employment with OS, did not render the “allocation” any less of a “direction” or a “requirement””. 63

[53] By failing to return a signed copy of the Allocation letter to OS by 22 October 2022 confirming their choice of alternatives the Appellants failed to comply with OS’ requirement. In direct consequence OS was entitled to state to the Appellants the things said in letters sent to each after the Phase 2 Conversations, namely that “[a]s you have not returned a signed copy of my letter, OS Production understands that you do not intend to continue with your employment” and “[y]our employment with OS Production will come to an end in accordance by your choice with effect on 1 November 2021”. We discern no error with the Deputy President’s findings that in not returning a signed Allocation Letter to OS or to attend for work at Blackwater that such was an abandonment of each Appellant’s employment and that while OS purported to accept the repudiation of their contracts of employment the situation was better described as “the [Appellants]’ renunciation which effectively brought the employment relationship between them and OS to an end”.

[54] Appeal Ground 3 posits that the Deputy President was in error to find that the Appellants’ were not forced to resign. We have difficulty with the very foundation of the Ground, since there is no evidence that any of the Appellants resigned their employment. It is well settled that “[t]he question whether a resignation did or did not occur does not depend upon the parties’ subjective intentions or understandings. Rather, it depends upon what a reasonable person in the position of the parties would have understood was the objective position”. 64

[55] The Decision found that none of the Appellants resigned, with none of them informing OS that they were resigning or had resigned. Noting that the absence of an express statement of resignation was not “fatal” to the Appellants’ contention they had resigned the Deputy President then analysed the available objective evidence. He noted, but put to one side, the absence of written notice of resignation from the employees, with there being “no doubt that an employee or an employer can terminate their employment relationship without giving notice in accordance with the terms of any applicable contract of employment”. He then considered whether the Appellants’ conduct in not accepting deployment to Blackwater demonstrated resignation and disagreed since,

“Their conduct in that regard, coupled with the fact that none of the [Appellants] returned the Allocation Letter to inform OS of their decision not “to continue … [their] employment with OS”, would have demonstrated to a reasonable person in the position of the parties that they were not willing to comply with a direction given to them in accordance with their employment contract to be deployed to Blackwater. In my assessment, the objective position, based on what OS and each Applicant did and said, in light of the surrounding circumstances, was that none of the [Appellants] resigned from their employment with OS”. 65 (footnote omitted)

[56] We concur with this analysis. There were no express statements of resignation from any of the Appellants. For there to be resignation implied objectively from all the circumstances it could be expected that some or all Appellants engaged with and returned the Allocation Letter or otherwise communicated matters to OS that would have required consideration or response, failing which resignation may be inferred. Koutalis v Pollett provides a case example of where resignation may be objectively inferred,

“In my opinion, the proper inference, having regard to all of the circumstances, is that Mr Pollett resigned in the conversation he had with Mr Koutalis on the morning of 5 May 2014. I am satisfied that what happened was set out, in substance, in the evidence of Mr and Mrs Koutalis. That is because immediately after his conversations with his employers, Mr Pollett went across the road and confirmed, in unequivocal terms, that he had resigned to Mr Malovini. Mr Malovini’s evidence satisfied me that, among other things, Mr Pollett had decided over the previous two weeks of his leave to start up his own business and that he had had enough of dealing with Mr and Mrs Koutalis.” 66

[57] These are positive findings about actual events about which the Court had evidence.

[58] In the context of the matters before him, it was not available to the Deputy President to find that the Appellants were dismissed within the meaning of either limb of s.386; none had their employment terminated on the employer’s initiative and none resigned from their employment let alone resigned through being forced to do so because of conduct, or a course of conduct, engaged in by their employer.

[59] It is unnecessary in this context for us to engage with the submissions made by the Appellants that the distance of Blackwater from Muswellbrook or the closure of State borders forced their circumstances.

[60] It follows from the above reasoning that we do not find either of Grounds 1, 2 or 3 to be established by the Appellants.”

 

Appeal of decision  Bourke and Others v OS MCAP Pty Ltd (2022)  FWCFB 178 delivered 4 October 2022 per Catanzariti VP, Bissett C and Wilson C