A recent decision of the Federal Court of Australia has confirmed that the question of an employer’s right to suspend an employee is still not fully understood by a lot of employers.
The case involved circumstances where an employee was “suspended” whilst certain aspects of that employee’s conduct was the subject of a review.
Whilst it is accepted that a detailed contract of employment may confer upon an employer the right to suspend an employee for a range of reasons, the case dealt with the circumstances of a right of an employer to suspend an employee at common law (in circumstances where the contract of employment did not specifically provide for the employer to suspend the employee for the purposes of an investigation).
The case reaffirmed that at common law, an employer has no right to suspend an employee without pay for misconduct, even if that misconduct would justify summary dismissal. An employee must take an “all or nothing” approach and either dismiss the employee or treat the contract as continuing.
However the common law has treated differently, suspension of an employee on full pay for a limited period.
Referring to other decided cases the court accepted that an employee may be suspended on full pay by an employer whilst the employer carries out an investigation into a complaint about, or actions of, the employee.
However in a decision which was cited as part of the case, the court accepted that a suspension on full pay during the period of investigation may not be a breach of employment contract at common law.
However the court also accepted that at common law, an employee does not have a right to suspend an employee indefinitely.
In the previous case it has been held that in the case of an employee who holds a senior, and highly skilled position where it is implicit the employee would have the opportunity to exercise and develop their skills, a direction not to perform work indefinitely was not “reasonable and equitable’, nor was it “necessary for business efficacy, not obvious, not capable of clear expression.”
The case highlights firstly the need for properly drawn employment contracts to clearly define the rights and obligations of employees and employers, including the right of suspension, and secondly, in the absence of a written contract, the right of an employer to suspend an employee is limited at common law to a reasonable period to carry out an investigation but also that the reason for the proposed investigation and the timing of the proposed investigation should be reasonable.