Abandonment of employment and how to deal with it

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1 WORKPLACE RELATIONS INSIGHTS Abandonment of employment and how to deal with it In brief: When an employee abandons their employment, you need to be clear about your rights and obligations as an employer, to avoid putting your business at risk. Being absent from work without authorisation or approval, or without supplying a reason, does not alone entitle an employer to dismiss the employee for having abandoned their employment. Genuine attempts to understand the reason/s for the employee s non-attendance should be made before any actions for dismissal are considered. What you need to know: Abandonment of employment is a situation where: By Michelle Dawson Partner ACCREDITED WORKPLACE RELATIONS SPECIALIST an employee does not attend work; and does not provide to their employer a reason for not attending work; and it is reasonable for an employer to conclude that the employee does not want to work for the employer any more. An employer should not dismiss an employee for abandonment of employment without first having made genuine and reasonable (dictated by common sense) attempts to understand the reason/s for the employee s nonattendance. If you do dismiss an employee without making such attempts, you will likely be faced with a claim which may be difficult for you to defend. Key points to consider with abandonment of employment An employee being absent from work without an employer s authorisation or approval or without supplying a reason, does not alone entitle an employer to dismiss an employee for having abandoned their employment. Even where an Award would seem to condone dismissing an employee for abandonment of employment, employers will be putting their businesses at risk if they dismiss an employee for abandonment of employment without first having made genuine attempts to understand the reason/s for the employee s nonattendance. And some Awards do condone it. For instance, the Manufacturing and Associated Industries Occupations Award 2010 provides as follows regarding abandonment of employment: 21. 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 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 ALSO IN THIS ISSUE Continued on next page. Investigating Workplace Complaints - The Masterclass 2 Employer justified in dismissing employee for offensive and damaging By Tim Greenall Special Counsel 3 Employee entitlements in a sale of a business By Emily Dempster Senior Associate 4 MAY

2 Continued from page 1. gone further than to simply try and 1 J Searle v Moly Mines Limited [AIRCFB 1088] (2008) contact the employee, by taking of their employer that they were absent for reasonable cause, the steps to check whether there was a new medical certificate for the For more information or specific employee is deemed to have otherwise unexplained period of advice in relation to abandonment abandoned their employment. absence (which, as it happened, of employment, please contact there was but the employer any member of our Workplace didn t know this because they d Relations Team. not checked ) 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. What that infers is that provided that the specified circumstances have occurred or are met, an employee can automatically be dismissed for abandonment. This is in fact not correct. Conclusion The take home message for employers in relation to abandonment of employment is that you should not dismiss an employee for abandonment of employment without first having made genuine and reasonable (dictated by common sense) attempts to understand the reason/s for the employee s non-attendance and that if you do dismiss an employee without making such attempts, you will likely be faced with a claim which may be difficult for you to defend. Case on point In Bienias v Iplex Pipelines Australia Pty Ltd t/as Iplex Pipelines Australia, a 2017 case determined by the Full Bench of the Fair Work Commission, it was found that clause 21 of the Manufacturing and Associated Industries Occupations Award (extracted above) does not operate as an automatic dismissal provision and that before an employer can rely on the clause, the employer must take the positive step of concluding that it is not satisfied that the employee was absent for reasonable cause before the [clause 21] operates. This means that employers must, before proceeding to dismiss an employee for abandonment, first make genuine attempts to find out the reason why the employee isn t at work. The most obvious and common way of doing this would be to seek to contact the employee, but the obligation will not end there and employers should exercise a common sense approach to trying to determine the reason for the employee not being at work. To illustrate, in a 2008 case 1 the Australian Industrial Relations Commission found that before dismissing an employee (who was absent for medical reasons) for abandonment after the medical certificates which she had provided to the employer had expired, the employer ought to have: considered the fact that the employee had made a workers compensation claim which may have been accepted; and Investigating Workplace Complaints - The Masterclass Aimed at HR manager level, the Masterclass is an interactive session which is both educative and practical in that it incorporates a series of relevant activities and materials which participants can subsequently utilise in the conduct of workplace investigations within their roles. The Masterclass will be conducted by Madgwicks Partner, Michelle Dawson (an LIV Accredited Workplace Relations Specialist), at Madgwicks head office in Melbourne. The 3.5-hour workshop, which includes lunch, will take place in small groups and covers: Why the need for a workplace investigation? Identifying whether an alternative approach to investigation is appropriate Determining who should investigate, including making the decision between using an internal or an external investigator The pros and cons of legal professional privilege in the context of workplace investigations Planning the investigation Ensuring procedural fairness Confidentiality Formulating allegations Preparing Terms of Reference Interviewing techniques Burdens of proof Preparing an investigation report Making findings Making recommendations Communicating outcomes REGISTER YOUR INTEREST Details Course Name: Masterclass Investigating Workplace Complaints (MWPR03) Cost: $375 per person (until 8 May) then $450 per person, excluding GST Date & Time: Thursday 25 May 2017, 12:30pm 4pm (lunch will be provided) Address: Madgwicks - Level 6, 140 William Street, Melbourne To register, please contact: colleen.stevens@madgwicks.com.au MAY

3 Employer justified in dismissing employee for offensive and damaging In brief: At times, apologies and remorse can be considered too little, too late. When an employee s thoughtless actions go so far as to impact negatively a company s reputation and breach a Code of Conduct, then dismissal may be deemed fair and reasonable. By Tim Greenall Special Counsel WORKPLACE RELATIONS In a recent case where an employee sent an offensive and damaging about the employer s clients, the Fair Work Commission (FWC) has ruled in favour of the employer and affirmed the employer s decision to terminate the employee s employment. This case serves as a solid reminder to employers to have stringent and IT policies, and make employees aware of the standards of conduct that are expected of them. What you need to know: In considering whether a dismissal is unfair, the FWC must take into consideration a variety of factors, including whether there was a valid reason for an employee s dismissal which relates to the employee s capacity or conduct and ensure that a fair go all round is accorded to both the employer and employee concerned. In this case, the dismissal was held to be fair even though the employee was long serving and not subject to any prior formal warning. Background In the case of Georgia Sologinkin v Cosmetic Suppliers Pty Ltd t/as Coty [2017] FWC1838, the employee was a Key Account Manager who had been employed for 16 years and worked her way up from being a junior Sales Representative to Team Leader and later, State Sales Manager. In August 2015, the employee had been placed on an informal performance improvement plan due to failure to meet KPI s in relation to sales and poor time management. However, by the end of 2015, the employee s performance had improved and she was no longer on an informal performance improvement plan. On the morning of 9 November 2016 the employee sent an intemperate and inappropriate to her employer s customer services team berating them as totally incompetent. On the same day, the employee composed an to a friend who had commenced working as a contractor to the employer. In this , the employee made a number of disparaging and, in at least one instance, highly offensive comments about some of the employer s clients that her friend would be dealing with. The included the addresses of the clients. By accident, the was sent not only to the friend, but also to the clients about whom the comments had been made! Process for termination On 10 November 2016, the employee was informed that she was temporarily suspended and not to contact any clients pending a disciplinary meeting the following Monday, 14 November The letter indicated that sending the to the clients was highly inappropriate, constituted a breach of the Code of Conduct and could amount to serious misconduct warranting, a warning or the termination of her employment. The employee was to be given an opportunity to provide any explanations or additional information and was invited to bring a support person to the meeting. That day, the employee advised that she was on work-related stress/sick leave and that she would be unable to attend the meeting. She had a medical certificate that she was unfit for work until the end of the week. The employer responded by stating that given the very serious nature of the incident and its impact on the employer s reputation the matter needed to be resolved as soon as possible and the employee was requested to provide a written response by the end of the following day. The employee provided a detailed response confirming that the incident was not intentional and acknowledged that it was deeply embarrassing and had been a terrible mistake. Termination of employment The employee s managers considered the employee s explanation and terminated her employment with notice by making a payment in lieu of notice. They took into account: the inappropriate comments made in the which were in breach of the Code of Conduct; that confidential information about clients was conveyed to other clients and damaged the employer s business and reputation; the employee s explanation and her expression of regret, and the fact that she had inadvertently copied the clients into the . Decision The FWC held that the employer was justified in terminating the employee s employment on the ground that the employment relationship was so damaged that the employer could no longer maintain trust and confidence in the employee. The contained a number of derogatory and offensive comments about the employer s clients. Even if these had not been sent to the clients themselves, these comments would have been entirely inappropriate, especially from someone in the employee s position, whose job it was to manage relations with key Continued on next page. MAY

4 Continued from page 3. customers. The comments were also in breach of the Code of Conduct and the IT User Conduct Policy, which specifically prohibited users of the system from including statements in an that would be embarrassing to either the user and/or the receiver if they were disclosed to the public. The FWC accepted that the was sent to clients by mistake. However, whatever the explanation as to how that happened, the ultimate responsibility must be borne by the employee. The not only had the potential to, but clearly did in fact, damage the employer s reputation and its relations with its clients. The FWC was also satisfied that the employee was given an opportunity to respond to the reasons for her termination even though the planned meeting did not proceed, and the employee was not subject to any prior warning and had apologised for her behaviour. Conclusion Whilst each case will turn on its facts, the decision is significant for the fact that one significant issue of misconduct may be sufficient to justify termination even where the employee is remorseful and not subject to any other form of performance warning. It is also noteworthy that the employer was able to effect a reasonable process in the dismissal, even though the employee was absent on sick leave and did not attend the scheduled disciplinary meeting in person. ENTERPRISE BARGAINING. CHANGE HAS ARRIVED. On 3 April 2017, the content of the Notice of Employee Representational Rights used during bargaining for an enterprise agreement changed. The change was effected by an amendment to the Fair Work Regulations It applies only to parties who issue the Notice from 3 April 2017 onward (any notice issued prior to 3 April 2017 will be valid if it properly conformed with the previous form of the notice). Employee entitlements in a sale of business By Emily Dempster Senior Associate WORKPLACE RELATIONS In brief: The ramifications of not being aware of the obligations regarding and/or not correctly dealing with employee entitlements can be costly (even if only taking into account the ultimate dollar value of the entitlements). What you need to know: Generally, where there is a transfer of business in accordance with the Fair Work Act 2009 (Cth) (FW Act), an employee s service with the old employer (the vendor) counts as service with the new employer (the purchaser). However there are exceptions to this general rule. Separate statutory principles apply to each of annual leave, personal leave, redundancy pay and long service leave. Clear agreement as to how the employee entitlements will be dealt with in a sale of business should be reached prior to completion and clearly set out in the sale of business contract. Dealing with employee entitlements (such as annual leave, personal leave, long service leave and redundancy pay) in a sale of business can be tricky. Read on for a brief description of how to deal with annual leave, personal leave, long service leave and redundancy pay in a sale of business. Continued on next page. MAY

5 Continued from page 4. Is there a transfer of business? The first thing that should be considered when determining how to deal with employee entitlements in a sale of business is whether there is a transfer of business as described in section 311 of the FW Act. Section 311 of the FW Act provides that there is a transfer of business if: the employee s employment with the old employer (the vendor) has been dismissed; within three months after the termination, the employee becomes employed by the new employer (the purchaser); the work the employee performs for the new employer is the same, or substantially the same, as the work the employee performed for the old employer; and there is a connection between the old employer and the new employer (i.e. there is a transfer of assets from the old employer to the new employer; the old employer outsources work to the new employer; the new employer ceases to outsource work to the new employer; and/or the new employer is an associated entity of the old employer). If there is not a transfer of business as described in section 311 of the FW Act, an employee s service with the old employer (the vendor) will not count as service with the new employer (the purchaser). Therefore, the old employer would simply deal with accrued annual leave, personal leave and redundancy pay in the same way that it would if it was an ordinary redundancy situation and the new employer would not need to recognise the employee s service with the old employer for the purposes of accrued annual leave, personal leave and redundancy pay. If there is a transfer of business as described in section 311 of the FW Act, accrued annual leave, personal leave and redundancy pay should be dealt with is follows. Annual Leave In a transfer of business, accrued annual leave entitlements can be dealt with in one of two ways: 1. If the new employer is not an associated entity of the old employer and the new employer is not recognising service for annual leave purposes, the old employer should pay out all accrued annual leave. As a result, the accrued annual leave entitlements will not transfer with the employee to the new employer; or 2. If paragraph number 1 above does not apply, accrued annual leave entitlements will transfer with the employee to the new employer. Personal Leave In a transfer of business, accrued personal leave entitlements cannot be paid out by the old employer and must therefore transfer with the employee to the new employer. Redundancy Pay Section 122(1) of the FW Act provides that in a transfer of business, redundancy pay entitlements can be dealt with in one of two ways: 1. If the new employer is recognising service with the old employer for redundancy pay purposes, the employee is not entitled to be paid redundancy pay when his or her employment with the old employer terminates (generally at completion). As a result, the employee s service with the old employer counts as service with the new employer for redundancy pay purposes; or 2. The new employer, provided it is not an associated entity of the old employer, can choose to not recognise an employee s service with the old employer for redundancy pay purposes and the old employer will be required to pay redundancy pay to the employee upon termination (generally at completion). Long Service Leave In Victoria, long service leave is governed by the Long Service Leave Act 1992 (Vic) (LSL Act). The LSL Act provides that where a business is sold and an employee remains with the business, or has less than a three month break between being dismissed by the old employer and being employed by the new employer, the new employer becomes responsible for the employee s long service leave entitlement. Long service leave cannot be paid out on transfer of business (section 74 of the LSL Act provides that it is an offence to give or receive payment instead of an employee actually taking the break from work). As such, in a transfer of business, service with the old employer will count as service with the new employer for the purposes of long service leave. Conclusion It is important for employers to be mindful of the extent of, and how to deal with, employee entitlements in a sale of business. As such, all details regarding employee entitlements should be provided during the due diligence stage so that the parties can have meaningful discussions, and reach agreement, regarding how employee entitlements will be dealt with in the sale of business. If you have any queries about any aspects above, please do not hesitate to drop me a line. i Note: In accordance with section 120 of the FW Act, the old employer may be able to apply to the Fair Work Commission to have the amount of redundancy pay varied on the basis that the old employer arranged other acceptable employment for the employee with the new employer. For more information or specific advice in relation to employee entitlements, please contact any member of our Workplace Relations Team. MAY

6 Our Team Michelle Dawson PARTNER Accredited Workplace Relations Specialist D: E: michelle.dawson@madgwicks.com.au Tim Greenall SPECIAL COUNSEL D: E: tim.greenall@madgwicks.com.au Emily Dempster SENIOR ASSOCIATE Nicole Davis LAWYER D: E: emily.dempster@madgwicks.com.au D: E: nicole.davis@madgwicks.com.au Our Office Our Disclaimer Level 6, 140 William Street Melbourne VIC 3000 T F This newsletter has been prepared by Madgwicks Lawyers to keep you up to date with important legal decisions and new legislation. It is intended to provide general information on topics current at the time of publication. No person should act on the basis of the contents of this publication without seeking formal legal advice. MAY