Norman v Transport Accident Commission

[2010] FWA 3549

[2010] FWA 3549

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.394 - Application for unfair dismissal remedy

Norman
v
Transport Accident Commission
(U2010/5485)

COMMISSIONER WHELAN MELBOURNE, 11 MAY 2010

Jurisdiction – s.394(2); abandonment of employment.

[1] This decision deals with two issues concerning an application made by Mr Norman under the provisions of section 394(1). The first of these is whether the application was lodged outside of the statutory time frame, and if so should an extension of time for lodgement be granted. The second is the respondent’s objection to jurisdiction, on the basis that there was no termination of employment at the initiative of the employer but rather an abandonment of his employment by the employee.

[2] Witness statements were provided by the applicant and Ms Zirkas and an affidavit of Ms Sullivan, a solicitor in the employ of the respondent’s representatives was also lodged. By agreement between the parties there was no cross-examination of the witnesses.

Background

[3] Mr Norman commenced employment with the respondent in July 2007. In August 2009 he submitted a request to take leave from 23 November 2009 to 22 January 2010 by entering this in the TAC annual leave planner. At the time he was in Compensation Team No. 4. In September 2009 he was transferred to Compensation Team No. 1 where Ms Zirkas became his supervisor.

[4] Mr Norman advised Ms Zirkas that he had entered his leave request in the planner in August and provided her with details and the reasons for the request for leave.

[5] In October 2009 Mr Norman booked and paid for tickets for himself and his partner to fly to Mauritius on 21 November 2009. On 5 November 209 he submitted a formal request for leave without pay from 23 November 2009 to 22 January 2010. At the time he had exhausted all his accrued annual leave and was in arrears of approximately 54.67 hours.

[6] On 17 November Ms Zirkas met with Mr Norman and advised him that his request for leave had been refused.

[7] It was Mr Norman’s evidence that he had spoken to Ms Zirkas on at least three occasions about his request for leave and whether there was any problem with its approval. Ms Zirkas did not indicate to him that TAC was considering refusing his request. When he met with her on 17 November he gave her details of his flights and told her that it was too late to cancel an international trip.

[8] On 20 November Mr Norman called Ms Zirkas to tell her that he was sick and would not be attending work. He called her back that afternoon and told her that he intended to board a flight leaving Australia the following day provided he received clearance from his doctor the next morning. He would be returning to Australia on 10 January 2010.

[9] On 27 November Ms Zirkas telephoned Mr Norman. He told her that he was on leave in Mauritius and would not be returning until 10 January 2010. He asked her not to call again.

[10] On 7 December 2009 Ms Zirkas sent a letter to Mr Norman’s residential address in Timboon. The letter required him to either attend work or provide ‘adequate reasons for your non attendance’ by Friday 11 December 2009.

[11] Mr Norman did not receive this letter until his return to Australia on 10 January 2010.

[12] On 17 December 2009 a further letter was sent to Mr Norman’s residential address advising him that because of his failure to contact his manager prior to close of business on 11 December 2009 his contact was terminated ‘effective Friday 18/11/2009’.

[13] This letter was sent by registered post. The records show that it was signed for by ‘M. Norman’ on 30 December 2009. ‘M. Norman’ is Mr Norman’s mother. She did not open the letter and it was received by Mr Norman on his return to Australia on 10 January 2010. Mr Norman immediately contacted his employer to complain that his employment was terminated by a letter sent to his home in Timboon when the respondent knew he was in Mauritius.

[14] Mr Norman stated that at no time did he indicate that he would not be returning to his position at TAC. Prior to his departure he discussed with Ms Zirkas which of his projects would need to be attended to by other employees and which could wait for his return. In none of his conversations with Ms Zirkas on 17 November, 20 November or 27 November did she indicate that his employment with the respondent was in jeopardy.

[15] Clause 33.1 of the Transport Accident Commission Enterprise Agreement 2008-2011 states, ‘Subject to the TAC’s business needs and circumstances of each particular application, an employee (other than a casual) may be granted leave without pay for a period of up to one year.’

Was the application lodged out of time?

[16] The evidence of Mr Norman was that he received the notice of termination, dated 17 December 2009 when he returned to Australia on 10 January 2010. It is not disputed that his mother collected the letter from the post office on 30 December 2009. Nor is it disputed that his mother did not open the letter or advise him of its arrival.

[17] The letter advises that his contract has been terminated ‘effective Friday the 18/11/2009’.

[18] Section 394(2) of the Act states that an application for an unfair dismissal remedy must be made:

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

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

[19] The respondent relies on the provisions of section 117 of the Act and in particular the note to that section to submit that the termination ‘took effect’ when the notice was delivered to Mr Norman’s last known address. The respondent submits that by virtue of section 117 of the Fair Work Act and section 28A(1)(ii) and 29 of the Acts Interpretation Act it is no longer the case that the termination of an employee’s agreement can only take effect once the notice is communicated to the employee.

[20] Section 117 is found in Division 11 of Part 2-2 of Chapter 2 of the Act. This part deals with what are generally referred to as the National Employment Standards (NES). Section 117 provides that an employer must not terminate an employee’s employment unless the employer has given the employee written notice of the day of the termination (which cannot be before the day the notice is given).

[21] The letter, in this case, refers to the termination taking effect on ‘18/11/2010’. This is accepted as being a typographical error and it is not suggested that the notice was ineffective because the date of termination was before the day the notice was given.

[22] The reference to the provisions of Section 28A and 29 occur in a footnote to section 117. As section 13 of the Acts Interpretation Act makes clear such notes are not part of the Act. At best the note is extrinsic material (under section 15AB(2)(a)) which may be used to assist in ascertaining the meaning of the provision, under section 15AB(1) or to provide an example of how the provision might apply (section 15AD).

[23] If section 15AB(1) applies the note may be used to:

(a) confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act, or:

(b) determine the meaning of a provision when

(i) the provision is ambiguous or obscure; or

(ii) the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act leads to a result that is manifestly absurd or is unreasonable.

[24] The reference in the note may also be an example of how notice might be given. If the example is inconsistent with the provision, the provision prevails (section 15AD(b)).

[25] The purpose of section 117(1) is to provide for an employee to be given written notice that their employment is to be terminated.

[26] The employer in this case was able to contact the applicant. Ms Zirkas, in fact, spoke to him on 27 November 2009. She was aware firstly that he was not in the country and secondly that he was not returning until 10 January 2010. Without any further attempt to contact him either by telephone or SMS messaging she nonetheless sent two letters to his home address.

[27] What was the point in sending the letter of 7 December? It appears only to be in order to establish the conditions for then sending the letter of 17 December. In circumstances where the employer has no idea where the employee is and if they intend to return to work or not such actions appear understandable. Where however the employer has full knowledge of the employee’s whereabouts, the capacity to contact him by phone, and the knowledge that he will not be in Australia for some weeks, the actions have the appearance of a charade.

[28] It is this charade which the employer says the Act endorses, that the respondent relies upon to say that the application in this matter has been lodged more than 14 days ‘after the dismissal took effect’.

[29] The provisions of section 28A and 29 of the Acts Interpretation Act are designed to assist a party to effect notice on a person. The reference to those sections in the note to section 117 is not in my view intended to provide a mechanism for avoiding the giving of actual notice to an employee in circumstances such as existed in this case.

[30] In any event, the employer’s reliance on the provisions of section 117 is misguided. On the respondent’s own submissions the letter sent to the employee was ‘received’ at his address on either 20 December when it was ‘delivered to his last known address’ or on 30 December when it was collected from the local post office by the applicant’s mother. These events predated the operation of section 117 which did not apply until 1 January 2010. In my view, the respondent cannot rely on the provisions of section 117 to submit that the reference to ‘within 14 days after the dismissal took effect’ means within 14 days of the dismissal taking effect in accordance with the note to section 117 of the Act when at the time the employer says the termination took effect section 117 was not binding on either the employee or the employer.

[31] In Makenja v Baptist Community Services, 1 a Full Bench of the AIRC expressed the view in relation to the predecessor provision to section 394(2) that, ‘Normally a termination of employment would not ‘take effect’ before it was communicated to the employee concerned, although that might not always be the case’.

[32] In Commonwealth of Australia (Australian Taxation Office) v Wilson another Full Bench elaborated upon this as follows:

Whilst it is clear that a contract can be terminated unilaterally, it is beyond contemplation, unless there is special provision in the contract to the contrary, that a contract could be terminated without communication of the termination to the other party. We think that at common law, where termination occurs by letter, generally the termination is not effective until the letter is received. There may be a qualification to that general position. It may be that, in some circumstances, a termination is effective when its communication could ordinarily be expected to have been received. If an employer has attempted in good faith to communicate the termination and the Commission forms the view that the employee has deliberately avoided receipt of such communication, it may be arguable that in such circumstances termination occurred despite the fact that it has not physically been communicated to the employee. 2

[33] I am not satisfied that the qualification suggested by the Full Bench in the extract above applies in the circumstances of this case. I find that the termination took effect when Mr Norman opened the employer’s letter of 17 December 2009 on his return to Australia on 10 January 2010. As the application was lodged on 22 January 2010 it was lodged within the 14 days allowed by section 394(2).

Was the employment terminated on the employer’s initiative?

[34] Section 386(1)(a) states that a person has been dismissed if the person’s employment with his or her employer has been terminated on the employer’s initiative.

[35] What will constitute termination at the initiative of the employer has been discussed by this tribunal and its predecessor in a number of cases.

[36] The starting point is the decision of the Full Bench of the Industrial Relations Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd (No. 2) 3 and in particular the passage of that decision commencing at page 205 of the Report. After referring to dictionary definitions of ‘initiative’, the Court went on to say:

These definitions reflect the ordinary meaning of the word ‘initiative’. Viewed as a whole, the Convention is plainly intended to protect workers from termination by the employer unless there is a valid reason for termination. It addresses the termination of the employment relationship by the employer. It accords with the purpose of the Convention to treat the expression ‘termination at the initiative of the employer’ as a reference to a termination that is brought about by an employer and which is not agreed to by the employee. Consistent with the ordinary meaning of the expression in the Convention, a termination of employment at the initiative of the employer may be treated as a termination in which the action of the employer is the principal contributing factor which leads to the termination of the employment relationship. We proceed on the basis that the termination of the employment relationship is what is comprehended by the expression ‘termination of employment’: Siagian v Sanel (1994) 1 IRCR 1 at 19; 54 IR 185 at 201. In many, if not most, situations the act of the employer that terminates the employment relationship is not only the act that puts in train the process leading to its termination but is, in substance, the entire process. An example would be a situation where the employer decided to dismiss an employee and did so orally or in writing with immediate effect. Other situations may be more complex as exemplified by the circumstances considered by Moore J in Grout v Gunnedah Shire Council (1994) 1 IRCR 143; 57 IR 243 where an employee had given written notice purporting to terminate the employment relationship. The notice was not reasonable but was accepted by the employer which later refused to allow the employee to withdraw the notice. A question arose as to whether that was a termination of the employment at the initiative of the employer and his Honour held it was. His Honour said at 160-161; 259:

‘I have already said that Div 3 concerns termination at the initiative of the employer. The respondent submits that “initiate” means “to begin, commence, enter upon; to introduce, set going, or initiate”: see Shorter Oxford English Dictionary. In this matter, it is submitted, it was the applicant and not the respondent that initiated the termination by writing the letter of 18 May. This, in my opinion, gives the expression “termination” in the Act, read in conjunction with Art 3 of the Convention which speaks of “termination … at the initiative of the employer”, a narrow meaning that was not intended. A principal purpose, if not the sole purpose, of Div 3 is to provide an employee with a right to seek a remedy in circumstances where the employee did not voluntarily leave the employment. An employee may do some act which is the first in a chain of events that leads to termination. An example would be an employee who engaged in misconduct at work which ultimately led to the employer dismissing the employee. However, that situation and the present are not situations where the termination was at the initiative of the employee. In both instances the step or steps that effectively terminated the employment or purported to do so were taken by the employer.’

In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship. This issue was addressed by Wilcox CJ in APESMA v David Graphics Pty Ltd (unreported, Industrial Relations Court of Australia, 12 July 1995, Wilcox CJ). His Honour, at p 3, referred to the situation of an employee who resigned because ‘he felt he had no other option’. His Honour described those circumstances as:

‘… a termination of employment at the instance [of] the employer rather than of the employee.’

And at p 5:

‘I agree with the proposition that termination may involve more than one action. But I think it is necessary to ask oneself what was the critical action, or what were the critical actions, that constituted a termination of the employment.’ 4

[37] Drawing on the reasons given in Mohazab and previous Full Benches of the Australian Industrial Relations Commission in Pawel v Advanced Precast Pty Ltd 5 and ABB Engineering Construction Pty Ltd v Doumit6, the Full Bench in O’Meara v Stanley Works7 concluded that termination at the initiative of the employer required:

that there be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end. It is not simply a question of whether ‘the act of the employer [resulted] directly or consequentially in the termination of the employment’.  8

[38] In his submission, Mr West placed emphasis on the fact that in the statutory context it is termination of the employment relationship, rather than termination of the employment contract, that is at issue.

[39] This is an important distinction in the case where abandonment of employment is alleged to be the reason for the termination of the employment. In common law, the abandonment of their employment by an employee constitutes a repudiation of their employment contract. The contract is not however terminated until, or unless that repudiation is accepted by the employer. It is the action of the employer in accepting the repudiation that brings about a termination of the employment.

[40] The statutory test however relates to termination of the employment relationship. In Seale v Moly Mines Limited, a Full Bench of the AIRC considered this distinction in the context of an alleged abandonment of employment. The relevant parts of their consideration are as follows:

[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 Lt 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. 9

[41] Support for this approach can also be found in the decision of the Full Bench in Glaxo Smith Kline Australia Pty Ltd v Gauci where at paragraph [19] the Full Bench said:

[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. 10

[42] The essential facts in this matter are not in dispute. Mr Norman sought unpaid leave from his employer for a period of some nine weeks. The industrial instrument governing his employment made provision for such leave to be granted but also makes it clear that the granting of such leave is discretionary. The leave was refused and Mr Norman proceeded to leave the country in accordance with the plans he had already made. In doing so Mr Norman failed to attend for work in accordance with his obligations as an employee. It is clear that Mr Norman was aware that the leave had not been granted and that he was therefore not authorised to be absent from his place of employment.

[43] This is not a case where the employee proceeded on authorised leave and was then delayed from returning to his employment by circumstances beyond his control. When Mr Norman got on the plane on 21 November he knew that he did so without his employer’s permission.

[44] Mr Reid submitted on his client’s behalf that Mr Norman always intended to return to his employment. While the intention of the parties will not always be an irrelevant consideration, it would require something more than Mr Norman’s subjective view of his future to refute the clear evidence that in proceeding to take leave when it had not been approved Mr Norman acted of his own volition and abandoned his employment.

[45] Further, it is clear that it is not the reasonableness or otherwise of his or his employer’s action which is relevant here 11 but rather whose actions bought about the termination of the employment relationship. In leaving the country for a period of some seven weeks knowing that he did not have the authorised leave to do so, Mr Norman brought about the termination of the employment relationship.

[46] Mr Norman has not identified (save for the employer’s advice that his employment contract was terminated) any action on the part of the employer which was either intended to bring the employment to an end or had the probable result of bringing the employment to an end.

[47] In those circumstances there has been no termination on the employer’s initiative and this Tribunal has no jurisdiction to deal with this application.

COMMISSIONER

Appearances:

M. Reid for N. Jeffery.

R. West for Transport Accident Commission.

Hearing details:

2010.

Melbourne:

April 16.

 1   Makenja v Baptist Community Services [2007] AIRC FB 38

 2   Commonwealth of Australia (Australian Taxation Office) v Wilson [PR901127] at [11].

 3   Mohazab v Dick Smith Electronics Pty Ltd (No. 2) (1995) 62 IR 200.

 4 62 IR 200 at 205-6.

 5   Pawel v Advanced Precase Pty Ltd [Print S5904].

 6   ABB Engineering Construction Pty Ltd v Doumit [Print N6999].

 7   O’Meara v Stanley Works [PR973462].

 8   PR973462 at [23].

 9   Searle v Moly Mines Limited [2008] AIRCFB 1088 [PR982301].

 10  Glaxo Smith Kline Australia Pty Ltd v Gauci [2008] AIRCFB 439 [PR981788].

 11   See Searle v Moly Mines Limited.

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