Jovan Sandic v Perroplas Australia Pty Ltd

[2010] FWA 8682

[2010] FWA 8682

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Jovan Sandic
v
Perroplas Australia Pty Ltd
(U2010/10679)

DEPUTY PRESIDENT HAMILTON MELBOURNE, 13 DECEMBER 2010

Termination of Employment - Extension of Time - Abandonment of Employment - Employee Absent on Holidays Overseas - Knowledge that absence would bring employment to an end

[1] On 16 July 2010 Mr.Jovan Sandic lodged an application under s.394 of the Fair Work Act 2009 (‘the Act’) for an unfair dismissal remedy with respect to what he claimed was the termination of his employment by Perroplas Australia Pty Ltd (‘Perroplas’).

[2] The matter was conciliated but no settlement was reached. The matter was heard before me on 10 November. The matter proceeded by way of hearing having regard to the views of the parties and the factors set out in s.399 of the Act.

[3] Written submissions were filed by each side, and the following witnesses were called:

• Mr.Jovan Sandic, applicant;



• Mr.Vasile Taleski, General Manager;



• Ms.Lyn Coombes, Plant Manager.

[4] I have had regard to all the submissions and evidence.

Evidence

[5] On 12 April 2010 Mr.Sandic applied for 2 months and 8 days leave from work, taking it as annual leave. The date of the last working day would be 27 April 2010 and the date of resuming work would be 5 July 2010.

[6] The leave form was signed as not approved, with the comment ‘Unpaid leave not approved’.

[7] On 13 April 2010 Ms.Coombes, the Plant Manager, signed a letter to Mr.Sandic which provided:

Dear Jovan

We are in receipt of your Application for Annual Leave. Your application states that you wish to take extended leave for a period of 2 months and 8 days. As your current annual leave accrual is only 13.68 days we understand that you are also applying for unpaid leave.

In view of your application, we wish to advise the following.

Leave without pay is not part of the industrial system and the company is under no obligation to accept your application, we can however allow your unpaid leave but with strict conditions. We advise you of these conditions as below.

• Unpaid leave is not subject to accruals for Annual Leave, Sick Leave or Long Service Leave.

• There will be no guarantee that the company will be able to maintain your position while you are away, which means there may be no employment available to you upon your return.

• Under these circumstances your employment with the company would be deemed terminated as at the end of your paid annual leave.

• It is advised that you contact us on your return from leave to confirm whether employment is available.

Could you please sign below in acknowledgement of this advice

Yours faithfully

[signed]

Lyn Coombes [signed]

Plant Manager Jovan Sandic

[8] Ms.Coombes’ evidence was not entirely consistent in various respects, but she claimed that its terms were explained to Mr.Sandic 1. Mr.Sandic’s evidence was also not entirely consistent, but he said that:

‘What did you understand the letter to mean, Mr.Sandic? - I understood that it says that there’s no guarantee for work when I come back but to call him - to telephone him.

Did you understand, though, that it meant that if you didn’t return at the end of your paid annual leave period that your employment would end? - Yes, but I didn’t actually think that actually that’s what would happen, because other people went with unpaid leave and came back’ 2

[9] He said that he believed that there was no guarantee of work when he came back to work after the leave 3. He also said that he believed that there would be work and he would therefore be taken back4. I had the opportunity to observe the witnesses giving evidence, which assists me in assessing their evidence.

[10] Did Mr.Sandic understand the conversation he had with Ms.Coombes? The applicant answered some questions in English during the hearing, and he appeared to have some understanding of the English language. Ms.Coombes said that she explained the letter to him 5. She said that he believed that he understood the letter, and that belief was based on past discussions she had with him6. I accept that he had sufficient understanding of the conversation to understand that if he remained away from work after his annual leave had expired, then this would mean the termination of his employment, and that he would not have a job unless the employer decided that it had work for him to perform. This would effectively be re-employment.

[11] He was at the very least put on notice sufficiently that leave was subject to conditions. He was given the opportunity to check the letter with someone before he signed it, because he took the letter away, signed it, and then returned it some days later. Further, the employer explained to him that at the cessation of his annual leave his employment would be terminated.

[12] The National Union of Workers (‘NUW’) representing the applicant, submitted that properly interpreted the letter was not a termination of employment but an approval of unpaid leave. However, the letter clearly provides that if Mr.Sandic was absent it was on the condition that ‘your employment would be deemed terminated as at the end of your paid annual leave’. This is consistent with the refusal to grant unpaid annual leave when Mr.Sandic applied for it, and with the conversation between Ms.Coombes and Mr.Sandic. Perroplas is a small business, and some degree of lack of clarity can be expected in correspondence of this kind. The correspondence must be interpreted in the light of the circumstances, and in any event the actual words are fully compatible with the interpretation that Mr.Sandic’s employment was terminated at the completion of his paid annual leave.

[13] Finally, Perroplas paid out Mr.Sandic’s entitlements before he left on leave, in a payment dated 27 April 2010. This is consistent with an interpretation that Mr.Sandic’s employment was at an end at the completion of his annual leave.

[14] In my view the refusal to approve unpaid leave, and the terms of the letter of 13 April 2010, were clear statements by the employer that Mr.Sandic was expected to resume work on the completion of his annual leave, and that if he did not resume his employment then, then Perroplas would terminate his employment from that date. This was reinforced by at least one discussion that Mr.Sandic had with Ms.Coombes. Mr.Sandic knew that work might be available so that his employment could resume, but that there was no guarantee of this of any kind.

[15] Knowing full well that this might be the end of his employment, Mr.Sandic nevertheless chose to be absent from work after the completion of his annual leave. He decided to be absent from work and remain on holiday.

[16] In my view Mr.Sandic’s employment was terminated by Perroplas from the date of completion of paid annual leave, which was 14 May 2010 7.

Extension of Time

[17] It is agreed that if this is the case, Mr.Sandic’s application was outside time by the amount of 60 days. Mr.Sandic sought an extension of time in which to lodge his application for an unfair dismissal remedy.

[18] Section 394(3) of the Act provides:

394 Application for unfair dismissal remedy

(1) A person who has been dismissed may apply to FWA for an order under Division 4 granting a remedy.

Note 1: Division 4 sets out when FWA may order a remedy for unfair dismissal.

Note 2: For application fees, see section 395.

Note 3: Part 6-1 may prevent an application being made under this Part in relation to a dismissal if an application or complaint has been made in relation to the dismissal other than under this Part.

(2) The application must be made:

(a) within 14 days after the dismissal took effect; or

(b) within such further period as FWA allows under subsection (3).

(3) FWA may allow a further period for the application to be made by a person under subsection (1) if FWA is satisfied that there are exceptional circumstances, taking into account:

(a) the reason for the delay; and

(b) whether the person first became aware of the dismissal after it had taken effect; and

(c) any action taken by the person to dispute the dismissal; and

(d) prejudice to the employer (including prejudice caused by the delay); and

(e) the merits of the application; and

(f) fairness as between the person and other persons in a similar position.

Section 394 (3)(a) the reason for the delay

[19] The NUW submitted on behalf of Mr.Sandic that Mr.Sandic was unaware that his employment had been terminated on 14 May. This was the reason for the delay in lodging an application. As soon as he became aware, that is, when he returned to Australia, he acted 8.

[20] However, the reason for the delay was that Mr.Sandic was overseas when his employment came to an end on 14 May. He was overseas because he had decided to remain on leave for a period which was not approved, except on the basis that his employment would come to an end. He knew his employment would come to an end. The reason for the delay does not persuade me that time should be extended.

Section 394 (3)(b) whether the person first became aware of the dismissal after it had taken effect

[21] The dismissal letter was in effect the employer’s letter of 13 April. Because of that letter and the payout of entitlements Mr.Sandic knew that the act of remaining on leave after annual leave had expired would bring his employment to an end. There is nothing in his knowledge of the dismissal and the circumstances that persuades me that an extension of time should be granted.

Section 394 (3)(c) any action taken by the person to dispute the dismissal

[22] Mr.Sandic disputed the dismissal when he returned to Australia and contacted Perroplas on 4 July.

Section 394 (3)(d) prejudice to the employer (including prejudice caused by the delay)

[23] It is not clear to me that there is prejudice to the employer in this case.

Section 394 (3)(e) the merits of the application

[24] There is little on the issue of merit of the case which assists or detracts from Mr.Sandic’s application for an extension of time.

Section 394 (3)(f) fairness as between the person and other persons in a similar position.

[25] There is little to distinguish Mr.Sandic’s position from those of others in a like position. Disputes over absence from work such as these are not unusual.

[26] Having regard to the approach taken to the term ‘exceptional circumstances’ in Mr Christopher Johnson v. Joy Manufacturing Co Pty Ltd t/as Joy Mining Machinery 9and elsewhere, in my view there are no exceptional circumstances justifying an extension of time. I refuse the application. I will therefore dismiss the application for an unfair dismissal remedy made by Mr.Sandic. This would be consistent with a fair go all round: s.381.

Abandonment of Employment

[27] In the alternative, if there was no termination effected by the letter of 13 April, Perroplas submitted that Mr.Sandic abandoned his employment.

[28] In Searle v. Moly Mines 10a Full Bench of Fair Work Australia said:

[22] Before turning to the facts of this case there is another issue which arose in the course of the submissions with which we should deal. That matter concerns the relevance of the principles governing the termination of a contract of employment. It is clear that the statutory test relates to termination of the employment relationship, not termination of the contract of employment. The difference is well illustrated by the following passage from the joint judgment of Brennan CJ and Dawson and Toohey JJ in Byrne and Frew v Australian Airlines Ltd:

‘It does not appear to have been doubted in this country that a wrongful dismissal terminates the employment relationship notwithstanding that the contract of employment may continue until the employee accepts the repudiation constituted by the wrongful dismissal and puts an end to the contract. That was accepted by both the majority and minority in Automatic Fire Sprinklers Pty Ltd v Watson [(1946) 72 CLR 435 at 471]. As Latham CJ said (at 454):

‘An employer terminates the employment of a servant when he dismisses him, though, as I say hereafter, such a dismissal does not put an end to the contract between the parties. An argument that a dismissal because wrongful was a nullity was raised and rejected in both Williamson’s Case [Williamson v The Commonwealth, (1907) 5 CLR 174 at 185] and Lucy’s Case [Lucy v The Commonwealth, (1923) 33 CLR 229 at 237, 238, 249, 252, 253].’

And as Dixon J said [Automatic Fire Sprinklers Pty Ltd v Watson at 545]:

‘there is nothing in the general law preventing the wrongful dismissal of a servant operating to discharge him from service, notwithstanding that he declines to accept the dismissal as absolving him from further performance but keeps the contract open and remains ready and willing to serve.’’

[23] In the case of wrongful dismissal, as the passage shows, the employment is terminated by the employer even though the contract continues until the employee accepts the repudiation, thereby bringing the contract to an end. In applying the statutory test it is the termination of the employment relationship which is important.

[29] InGlaxo Smith Kline Australia Pty Ltd v Gauci 11 a Full Bench said at 19:

[19] There is an additional contention advanced by the respondent’s counsel which requires comment. It was argued that even if the respondent had abandoned his employment that would not constitute termination. It would constitute repudiation of the contract. Because GSK had elected to treat the repudiation as terminating the contract the employment was terminated at GSK’s initiative. This argument raises an issue of potential significance in any case involving conduct by an employee which constitutes repudiation of the contract of employment. It is not necessary to decide the issue in this case, however, because we have not disturbed the finding that there was no abandonment and therefore the question of repudiation does not arise. But we observe that the argument may blur the distinction between termination of employment and termination of the contract of employment. The question posed by the statute is whether the employment was terminated at the initiative of the employer. An analysis based on contractual notions of repudiation and acceptance may not always correspond with the statutory concept.

[30] In Dallas Moore and Levelan Pty Ltd 12I found that there was no intention on the part of the employee to bring the employment relationship to an end. Rather there was a small but temporary absence followed by an attendance at work, and a deliberate decision by the employer to prevent the employee attending work, which was a termination of employment. Similarly, in Ms Susann Sharpe v MCG Group Pty Ltd13 there was no intention on the part of the employee to no longer be bound by her employment contract. She was, rather, incapacitated for work.

[31] For the reasons given above Mr.Sandic went and remained on leave past the date of 14 May when his annual leave expired. As I found earlier, the refusal to approve unpaid leave, and the terms of the letter of 13 April 2010, were clear statements by the employer that Mr.Sandic was expected to resume work on the completion of his annual leave on 14 May, and that his employment would end if he did not resume work on that date. Mr.Sandic knew this. This was reinforced by at least one discussion that Mr.Sandic had with Ms.Coombes. Knowing full well that this might be the end of his employment, Mr.Sandic nevertheless chose to be absent from work after the completion of his annual leave. He decided to be absent from work and remain on holiday for a considerable period, and did not contact Perroplas again until 4 July.

[32] In my view there was a clear intention on both sides that the employment relationship would end when Mr.Sandic did not return to work on 14 May as required. Perroplas told Mr.Sandic that his job would come to an end, and Mr.Sandic nevertheless chose to absent himself of his own free volition in knowledge of that advice, and did so for a considerable period. In my view, if Perroplas did not terminate Mr.Sandic’s employment, Mr.Sandic abandoned his employment.

Conclusion

[33] For these reasons I dismiss the application made by Mr.Sandic under s.394. An order dismissing the application is contained in PR504548.

DEPUTY PRESIDENT

Appearances:

Mr D Mujkic of the National Union of Workers for the Applicant Mr J Sandic.

Ms N Sheridan of the AiGroup for the Respondent Perroplas Australia Pty Ltd

Hearing details:

Melbourne

2010

10 November

 1   PN436-438

 2   PN125-126

 3   Eg. PN141, 142, 145, 147, 148, 154

 4   Eg.PN160, 126

 5   PN436-438

 6   PN359-361

 7   PN466, NUW submissions.

 8   PN494-496

 9   [2010] FWA 1394 PR994029

 10   [2008] AIRC 210 PR980994

 11   [2008] AIRCFB 439 [PR981788]

 12   Hamilton DP, PR944224 AIRC, 5 March 2004

 13   Asbury C, [2010] FWA 2357 PR995314

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