Contains issues that may form the basis of a jurisdictional issue
See Fair Work Act 2009 s.386(1)(a)
The expression ‘termination at the initiative of the employer’ is a reference to a termination that is brought about by an employer and which is not agreed to by the employee.[1]
The analysis of whether there has been a termination at the initiative of the employer for the purpose of s.386(1)(a) is to be conducted by reference to termination of the employment relationship, not by reference to the termination of the contract of employment operative immediately before the cessation of the employment.[2]
The termination of a contract of employment does not necessarily result in the termination of the employment relationship between the parties to that contract of employment: if the parties enter, or are taken to have entered, a new contract of employment, the employment relationship continues notwithstanding the termination of a prior contract of employment.[3]
Termination of employment may be ‘at the initiative of’ the employer even though it occurs in circumstances where the parties have agreed to a time-limited contract expiring on a specified date. The facts of a particular case may establish some decision or act on the part of the employer that brought about the end of the employment relationship (as distinct from the employment ending by effluxion of time).[4]
A termination is at the employer's initiative when:
There must be action by the employer that either intends to bring the relationship to an end or has that probable result.[6]
The question of whether the act of an employer results 'directly or consequentially' in the termination of employment is an important consideration but it is not the only consideration.[7] It is important to examine all of the circumstances including the conduct of the employer and the employee.[8]
The test for repudiation by the employer is whether the conduct of the employer, when judged objectively, showed an intention to no longer be bound by a contract.[9] The employer's actual or subjective intention is not relevant.[10]
A repudiation of the contract does not bring the contract to an automatic end but gives the affected party the right to terminate the contract.[11] If the affected party accepts the repudiation the contract will end. [12]
Where an employer has repudiated the contract, and an employee accepts the repudiation and exercises their right to terminate the contract, this will amount to a termination at the employer's initiative.
An employee may engage in conduct amounting to a repudiation by seriously breaching the contract of employment.
The question of whether there has been a repudiation of the contract of employment is determined objectively. It is unnecessary to show a subjective intention to repudiate and is a question of fact not law.[13]
Repudiation may exist where an employer reduces the wages of an employee without the employee’s consent or where there is a serious non-consensual intrusion on the nature of the employee’s status and responsibilities in a way which is not permitted by the contract. Similarly, if an employer seeks to bring about a change in the employee’s duties or place of work which is not within the scope of the express or implied terms of the contract of employment, the conduct may evince an intention to no longer be bound by those terms. Therefore, in these circumstances if an employee does not agree to the change, which if agreed would amount to a variation of the contract, the employee may claim to have been constructively dismissed.[14]
‘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 as a result shows an unwillingness or inability to substantially perform his or her obligations under the employment contract.[15]
This may be termed a ‘renunciation’ of the employment contract.
Renunciation is ‘the formal abandoning of a right, title, etc’ or ‘a voluntary giving up, especially as a sacrifice’.[16]
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.[17]
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.
Termination at the employer's initiative requires the termination of the employment relationship, not the contract of employment.[18]
[1] Khayam v Navitas English Pty Ltd t/a Navitas English [2017] FWCFB 5162 (Hatcher VP, Colman DP, Saunders C, 8 December 2017) at para. 75; see also Mohazab v Dick Smith Electronics Pty Ltd (No 2) [1995] IRCA 645 (29 November 1995), [(1995) 62 IR 200].
[2] Khayam v Navitas English Pty Ltd t/a Navitas English [2017] FWCFB 5162 (Hatcher VP, Colman DP, Saunders C, 8 December 2017) at para. 75.
[3] Department of Justice v Lunn PR974185 (AIRCFB, Lawler VP, Harrison SDP, Raffaelli C, 27 November 2006) at para. 27, [(2006) 158 IR 410]; citing Brackenridge v Toyota Motor Corporation Australia [1996] IRCA 163 (19 April 1996).
[4] Khayam v Navitas English Pty Ltd t/a Navitas English [2017] FWCFB 5162 (Hatcher VP, Colman DP, Saunders C, 8 December 2017) at para. 75; see also Mahony v White [2016] FCAFC 160 (29 November 2016) at para. 20.
[5] Mohazab v Dick Smith Electronics Pty Ltd (No 2) [1995] IRCA 645 (29 November 1995), [(1995) 62 IR 200 at p. 205].
[6] Barkla v G4S Custodial Services Pty Ltd [2011] FWAFB 3769 (Watson VP, O'Callaghan SDP, Cargill C, 8 July 2011) at para. 24, [(2011) 212 IR 248]; citing O'Meara v Stanley Works Pty Ltd, PR973462 (AIRCFB, Giudice J, Watson VP, Cribb C, 11 August 2006) at para. 23, [(2006) 58 AILR 100].
[7] Pawel v Advanced Precast Pty Ltd, Print S5904 (AIRCFB, Polites SDP, Watson SDP, Gay C, 12 May 2000).
[8] O'Meara v Stanley Works Pty Ltd, PR973462 (AIRCFB, Giudice J, Watson VP, Cribb C, 11 August 2006) at para. 23, [(2006) 58 AILR 100].; citing Pawel v Advanced Precast Pty Ltd, Print S5904 (AIRCFB, Polites SDP, Watson SDP, Gay C, 12 May 2000); Mohazab v Dick Smith Electronics Pty Ltd (No 2) [1995] IRCA 645 (29 November 1995), [(1995) 62 IR 200]; ABB Engineering Construction Pty Ltd v Doumit, Print N6999 (AIRCFB, Munro J, Duncan DP, Merriman C, 9 December 1996).
[9] Elgammal v BlackRange Wealth Management Pty Ltd [2011] FWAFB 4038 (Harrison SDP, Richards SDP, Williams C, 30 June 2007) at para. 13.
[10] ibid.
[11] Visscher v The Honourable President Justice Giudice [2009] HCA 34 (2 September 2009) at para. 81, [(2009) 239 CLR 361].
[12] ibid., see also Dover-Ray v Real Insurance Pty Ltd [2010] FWAFB 2670 (Lawler VP, Richards SDP, Larkin C, 9 April 2010) at para. 23, [(2010) 194 IR 22].
[13] Simon v NGS Group Pty Ltd ATF NGS Discretionary Unit Trust [2019] FWC 3442 (Wilson C, 5 June 2019) at para. 56.
[14] ibid.
[15] Abandonment of Employment [2018] FWCFB 139 (Hatcher VP, Gostencnik DP, Cribb C, 23 January 2018) at para. 21.
[16] The Macquarie Dictionary Online.
[17] Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61 (13 December 2007) at para. 41; citing Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23 (2 May 1989) at para. 16 (per Deane and Dawson JJ), [(1989) 166 CLR 623 at p. 659]; see for eg Thompson v Zadlea Pty Ltd T/A Atlas Steel [2019] FWC 1687 (Gregory C, 15 March 2019) at paras 49–53.
[18] Searle v Moly Mines Limited [2008] AIRCFB 1088 (Giudice J, O'Callaghan SDP, Cribb C, 29 July 2008) at para. 22, [(2008) 174 IR 21]; citing Byrne v Australian Airlines Ltd [1995] HCA 24 (11 October 1995) at para. 23 (Brennan CJ, Dawson and Toohey JJ), [(1995) 185 CLR 410 at p. 427].