Employee refusal to comply with change in work location direction held to constitute abandonment of employment

In the recent decision of John Bourke v OS MCAP Pty Ltd [2022] FWFCB 178, the Full Bench of the Fair Work Commission (FWC) confirmed that employees who had not accepted an offer to transfer to a new site 1,700km away from their previous place of work abandoned their employment. This case illustrates the importance of including clauses in contracts which provide that employees may be required to work away from their usual place of work at the direction of the employer.

Facts

The seventeen appellants (the Appellants) were employed in the role of Production Technicians by OS MCAP Pty Ltd (OS). OS provided production services to a variety of BHP sites. The Appellants worked at BHP’s Mt Arthur coal mine in the Hunter Valley in New South Wales, although their employment contracts provided that they could be required to work on ‘multiple sites across the East Coast of Australia as directed by [OS].’

On 20 July 2021, the Appellants and others employed at Mt Arthur were informed that OS would not be required to provide services at Mt Arthur after 1 November 2021. Staff were informed that all employees would be entitled to employment with OS at an alternative site and asked to nominate their preferred site. Employees who did not wish to be employed at an alternative site were told that they were required to resign.

The Appellants did not nominate a preferred site, so OS issued a letter to each of the Appellants, advising that they had been assigned to work at the Blackwater Mine in Emerald, Queensland, approximately 1,200 km away from Mt Arthur. They were asked to return a signed copy of the letter confirming whether they would continue to work at Blackwater or if they did not wish to continue their employment with OS. The Appellants did not sign or return the paperwork. The final written correspondence from OS stated that since the Appellants had not confirmed that they wished to continue their employment with OS, their employment would come to an end with effect on 1 November 2021. As no response was received, the Appellants’ employment ceased on that date.

The Appellants filed unfair dismissal applications with the FWC. Their applications were heard together given that they all arose from the same core factual matrix.

Decision at first instance

At the first instance OS raised a jurisdictional objection on the basis that the Appellants’ employment had not been dismissed for the purposes of section 386 of the Fair Work Act 2009 (Cth) (FW Act). This section provides that a person is dismissed if their employment is terminated on the employer’s initiative, or they were forced to resign from their employment because of the employer’s conduct.

Deputy President Saunders (the Deputy President) agreed that the Applicants had not been forced to resign or terminated at OS’ initiative. The instruction for the Appellants to work at Blackwater was a ‘direction’ to work at an alternate site across the East Coast of Australia. The Appellants then failed to comply with that lawful and reasonable direction. The failure to comply with this direction conveyed a refusal to work in accordance with their employment contracts, or in other words, a repudiation of the employment contract. Accordingly, the Appellants were found to have abandoned their employment.

Appeal

On appeal, the Appellants submitted that the Deputy President had wrongly concluded that they had not been dismissed on the following grounds:

• they had not been ‘directed’ to work at Blackwater but rather asked to choose whether they wished to work at Blackwater;
• their employment was confined to the Mt Arthur site, so their failure to work elsewhere did not constitute a repudiation of the contract; or
• the cessation of their employment was due to a forced resignation (also known as a constructive dismissal).

In relation to the first ground, the Full Bench rejected the Appellants’ submission that the possibility of working at Blackwater was presented as a choice rather than a direction. The Full Bench considered that reasonably viewed, the Appellants had been directed to either confirm they would be working at Blackwater, or to confirm that they did not wish to maintain their employment with OS.

Regarding the second ground, the Full Bench considered that the terms of the employment contract, specifically the clause requiring workers to work in sites across the east coast, were clear and fundamental, given OS’ business supplied labour to a variety of sites across the east coast. When OS then attempted to exercise its contractual right to direct the Appellants to work at the Blackwater site, the Appellants failed to comply with this lawful and reasonable direction. Failure to comply with a fundamental term of the contract subsequently repudiated the contract. OS accepted the Appellants’ repudiation of the contract. Accordingly, the Full Bench agreed that the employment relationships had been brought to an end by the Appellants, not by the conduct of OS.

In relation to the third ground, the Full Bench noted that there had been no express statements of resignation from the Appellants. While a constructive dismissal does not necessarily require a statement of resignation, an analysis of the conduct of the parties in not accepting employment was required to determine whether resignation could be implied. In this case, the Appellants had not engaged in any conduct which appeared to demonstrate a resignation had occurred, particularly given they had not even submitted the paperwork to confirm they did not wish to continue their employment.

The Full Bench upheld the Deputy President’s decision and found that the Appellants had not been dismissed.

Take home messages

This case illustrates the usefulness of employment contracts containing clauses requiring employees to work from multiple work locations at the direction of the employer. This clause meant that OS could retain many of its employees and prevented OS from being required to pay redundancy to those employees who did not wish to be redeployed.

However, the reasonableness of the direction will also be a relevant consideration. The FWC was careful to note that the use of this type of clause was appropriate in the circumstances given OS provided services to a variety of sites across the east coast of Australia. It is open to conclude that such a clause may not be appropriate for other employers who do not operate across multiple locations or require the same level of mobility in their workforce.

Should you have any queries in relation to this article or wish to discuss the application of this case to your workforce, please contact Lincoln Smith on + 61 8 8210 1203 or lsmith@normans.com.au, Anastasia Gravas on + 61 8 8210 1331 or agravas@normans.com.au, or Annabelle Narayan on +61 8 8210 1292 or anarayan@normans.com.au.