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Don’t act with abandon towards absent employees

7 august 2015


We all have those mornings. The rain is bucketing down outside, it’s warm and cosy inside, and the motivation to go to work is utterly absent.

This struggle is familiar to all, yet for the vast majority, exerting one’s will-power over the situation and marching to work is mandatory.

Turning up to work is even more necessary than many employees realise, as most employment agreements contain ‘abandonment clauses’ which deem an employee to have terminated their employment if they are absent for a certain period without authorisation.

However, the view emerging from the court is that these clauses are far from fool-proof. Employers would be unwise to rely on them holding up in many circumstances.

In the recent case of Kar v Bakers Magnum Ltd, Mr Kar was an employee at Bakers Magnum. He was away from work on ACC due to an injury. Kar showed his payslip to another employee that he knew was earning less than him, upsetting the individual in the process.

The company directors telephoned Kar to talk about the distress caused to the other employee and then praised the work the employee had been doing while Kar was away on ACC. Kar replied, “Then give my job to [him], I’m not going to do it” and hung up the phone.

When the directors immediately called him back he did not answer the phone. Kar later alleged he said “If [he] can handle my job, don’t call me while I am on sick leave to come back to work”, but admitted to hanging up and subsequently declining phone calls.

Six days later Kar found a large payment in his bank account from Bakers Magnum. As Kar was on ACC at the time, this was unexpected. When he asked the directors of the company about it he was told it was his final pay. He then received a letter saying that he had handed his job over to other staff and abandoned his position.

The abandonment clause stated “when an employee is absent from work for a continuous period of two days without the consent of the employer, or without offering an explanation acceptable to the employer, that employee shall be deemed to have terminated his/her employment.” There was no expectation that Kar would be at work as the employer knew exactly why he was absent - he was away on ACC for an injury. After additional considerations, the Employment Relations Authority decided there was no abandonment and the employer had unjustifiably dismissed Kar.

In 2006, a similar outcome was found by the Employment Court in Spotless Services (NZ) v Morrison. An employee with a history of absences requested leave for surgery and subsequently had the leave declined.

The employee took time off work for the surgery anyway. The employer viewed this as the employee abandoning their contract.

The Employment Court found that upon the information provided to the employer, they should have known the employee’s medical condition was serious and therefore the employee did require surgery. The employer had acted unreasonably by not providing the leave.

The Court also found it was not possible for the employer to find the employment was abandoned as the employee had advised management of her reasons for absence, and the date of her return. Therefore abandonment was not found and the employer was held to have unjustifiably dismissed the employee. 

The concept of abandonment and the inclusion of abandonment clauses in employment agreements remain commonplace. They certainly have their place in law for situations where the employee simply doesn’t come to work for a time, without any explanation, and they have not suffered a serious accident.

However, in light of the discussed cases, it would be prudent for employers not to place too much reliance on the abandonment clause being watertight.

Before deciding an employee has abandoned their contract, employers should make reasonable efforts to find out where the employee is and whether they intend to return, and to record their attempts at communicating with the employee. They need to advise the employee by phone, email and in writing to their last known address, that unless they contact the employer by a certain time, the employer will regard their employment as terminated by abandonment.

If there is still no response, the employer should advise the employee by phone, email and in writing that, in accordance with the employer’s previous communication, the employer now regards the employee’s employment terminated by reason of abandonment.

Cullen - The Employment Law Firm is one of only eleven law firms in New Zealand approved to provide employment law services to Government and the public sector.

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