Dean Sherriff v Veolia Environmental Services (Australia) Pty Ltd

[2015] FWC 6876

[2015] FWC 6876 [Note: An appeal pursuant to s.604 (C2015/7091) was lodged against this decision.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Dean Sherriff
v
Veolia Environmental Services (Australia) Pty Ltd
(U2015/9414)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 8 OCTOBER 2015

Application for relief from unfair dismissal – meaning of dismissal – employee remains employed – repudiation of contract – dispute able to be dealt with under Enterprise Agreement – no jurisdiction.

[1] On 16 July 2015 Mr Wright, of counsel lodged an application on behalf of Mr Sherriff pursuant to s.394 of the Fair Work Act 2009 (the FW Act). The application advised that Mr Sherriff had been constructively dismissed by Veolia Environmental Services (Australia) Pty Ltd T/A Veolia Environmental Services (Veolia), when he was told by his foreman that he would not be permitted to drive trucks again. The application contended that the employment termination took effect from the date of this advice.

[2] In its Employers Response (Form F3) Veolia contended that Mr Sherriff had not been dismissed and remains an employee.

[3] Mr Sherriff’s application was unable to be settled through the conciliation process. It was referred to me for determination. It was the subject of a hearing on 6 October 2015. Both parties provided substantial submissions and material in support of their respective positions. Mr Wright, of counsel represented Mr Sherriff. Mr Bakewell, of counsel, represented Veolia. In both cases permission was granted pursuant to s.596(2)(a) and (c).

[4] At the commencement of the hearing on 6 October 2015 I provided the parties with a summary of the background facts, based on Mr Sherriff’s evidence, which I regarded as particularly relevant to the question of whether Mr Sherriff had been dismissed. This background was then modified to take into account a number of amendments requested by Mr Sherriff. I have set out below these background facts in their amended form.

Background Facts relevant to whether Mr Sherriff was dismissed

Mr Sherriff commenced employment with Veolia Environmental Services (Australia) Pty Ltd (Veolia) in 2006 or 2007. The date of the commencement of his employment is not relevant to the issue to be determined in this application. Mr Sherriff initially worked on a regular casual basis. His employment was converted to full-time weekly hire in 2013 or 2014.

From around 2008 Mr Sherriff undertook liquid tanker driver duties. He was the driver of a Veolia truck involved in an accident in February 2013. The extent of his culpability for this accident is disputed. Subsequent to the accident, Mr Sherriff was allocated duties at a Veolia Waste Management facility. He undertook further truck driving activities from November 2014.

Mr Sherriff was involved in an incident in March 2015. The circumstances of that incident are disputed. Mr Sherriff may have been given a written warning but any such warning is not relied upon by Veolia relative to jurisdiction in this matter.

In April 2015 Veolia raised allegations with Mr Sherriff over his use of seat belts in the truck he was driving in the Moomba area. Mr Sherriff asserts that he was told that he would be given a warning but, more particularly, that he would not be given any further driving duties until further notice. He was allocated work sorting cans and recycling for the remainder of his allocated cycle time at Moomba. Mr Sherriff asserts that, on his return to Adelaide he was further advised that he would not be permitted to undertake driving duties ever again. Mr Sherriff advises that he continues to receive the same wage that was applicable to him whilst he was driving trucks and remains working in the recycling yard but without driving duties. Mr Sherriff advises that he has not been paid overtime since that time.

Mr Sherriff seeks to have his driving duties reinstated.

Whilst there are various disputed issues of fact in relation to Mr Sherriff’s particular circumstances, there is no disagreement that he was, and is currently classified and paid as a Level 4 employee under the Veolia Environmental Services (Australia) Pty Ltd Cooper Basin Enterprise Agreement 2014-2017.

The Jurisdictional issue

[5] Having reached agreement with the parties on these relevant background issues, I requested submissions on the initial question for determination in this matter. This went to whether or not Mr Sherriff had been dismissed. I referred the parties to s.385 which establishes that dismissal is an unequivocal prerequisite of any unfair dismissal finding. Further, s.386 defines a dismissal. This section states:

386 Meaning of dismissed

(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.

(2) However, a person has not been dismissed if:

(a) the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or

(b) the person was an employee:

(i) to whom a training arrangement applied; and

(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement;

and the employment has terminated at the end of the training arrangement; or

(c) the person was demoted in employment but:

(i) the demotion does not involve a significant reduction in his or her remuneration or duties; and

(ii) he or she remains employed with the employer that effected the demotion.

(3) Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person’s employment, to avoid the employer’s obligations under this Part.”

[6] I expressed the preliminary view that if I accepted all of the evidence of Mr Sherriff for the purposes of considering this section of the FW Act, it seemed that Mr Sherriff has had no reduction in his remuneration, but an arguable reduction in his duties and that he remains an employee of Veolia.

[7] Further, I expressed the view that s.386(2)(c) appears to require both a significant reduction in remuneration or duties and discontinuation of the employment relationship. The establishment simply of a reduction in duties does not appear, of itself, to represent a dismissal and, in circumstances of this nature where an employee remains employed there can be no dismissal for the purposes of s.386.

[8] Both parties were provided with the opportunity to consider this issue.

[9] Mr Sherriff’s position was that the decision to permanently remove Mr Sherriff from driving duties pursuant to his Level 4 Operator position constituted a dismissal and that his current position represents substantially different and reduced duties. Mr Sherriff’s submission was that the significant reduction in his duties constituted a dismissal and that he had only continued to undertake the diminished duties under protest such that the employment contract under which he previously worked had been terminated at the initiative of the employer and he was able to pursue an application of this nature.

[10] Mr Sherriff relied on the decision of the Court of Victoria in Whittaker v Unisys Australia Pty Ltd 1 in which the Court considered whether the employer’s conduct represented a repudiation of the employment contract. In that matter, Ross J stated:

“34 Whether there has been a repudiation in a particular case is a question of fact.

35 Not every breach of contract is a repudiation and repudiatory conduct is not to be inferred lightly. Repudiation may be evidenced by a single act or by an accumulation of conduct in circumstances where no individual act on its own constitutes a repudiation.

36 A repudiatory breach does not automatically terminate the contract but confers an elective right of termination on the innocent party.” (references removed)

[11] I note at the outset that Mr Sherriff’s circumstances differ substantially from those addressed in Whittaker. Mr Whittaker did not undertake the revised role allocated to him. He refused that role such that his employment came to an end.

[12] I note that Mr Sherriff also relied on various other authorities in support of his position. He advised that:

“186. On or about the 30^th June 2015 I asked the foreman of the day, Gerald Murphy as to when I might be able to drive (Heavy vehicles) again.

187. Gerald said that he was advised I would not be permitted drive “forever and a day”.

188. It was at that point I realised my job had been changed dramatically as the majority of my job, until the seatbelt issue, had been driving duties.

189. It really concerned me not being able to drive because if I cannot drive then I cannot maintain my skillset as a driver. This could preclude or disadvantage me from getting any other work in the open labor market.

190. It was at this point that I contacted the union and asked whether taking away my driving duties was fair.”

[13] Veolia’s refusal to provide driving duties to Mr Sherriff was then the subject of the meeting between him and his union on 9 July 2015. Mr Sherriff agrees that this meeting did not resolve the matter and there is no indication that the issue was taken further, consistent with the dispute resolution provisions of the Agreement. Mr Sherriff agrees that this option was, and still is, available to him.

[14] The Veolia position was that the change in Mr Sherriff’s allocated duties did not represent a significant reduction in duties given the terms of the Agreement, there was no reduction in remuneration, and Mr Sherriff remained in employment. Accordingly, Veolia asserted that Mr Sherriff had not been dismissed so as to enliven the jurisdiction of the Commission. Veolia asserts that it only became aware of Mr Sherriff’s argument that his employment had been terminated when it received advice of this application and that, upon receiving that advice it confirmed that it remained open to discussion relative to those duties.

Findings

[15] The plain words of s.386(2)(c) must be construed such that a demotion in employment can only constitute dismissal for the purposes of Division 3 of Part 3-2 of the FW Act if the employee does not remain employed by that employer and the demotion involves either a significant reduction in the employee’s remuneration or duties. This section of the FW Act does not provide that a reduction in either duties or remuneration is sufficient, of itself, to constitute a dismissal. A mandatory requirement is that the employee no longer remains employed. That approach is consistent with the approach in the Full Bench decision in Barkla v G4S Custodial Services Pty Ltd. 2

[16] Notwithstanding this, it is clear that various decisions have dealt with circumstances where the employer has made a unilateral change to the employment arrangement which amounts to a repudiation of the employment contract. In Lollback v University of Southern Queensland 3 Gooley DP considered whether a demotion represented termination of employment with particular reference to the extent to which the demotion in that circumstance was properly described as the termination at the initiative of the employer, notwithstanding that the employment relationship continued. In that matter the Deputy President had regard to various other authorities in reaching a conclusion about whether the applicable enterprise agreement authorised the demotion. Having concluded that the provisions of the applicable agreement which dealt with demotion could not be considered to be unlawful terms, the Deputy President then concluded that the demotion in that instance was not a termination of employment. Whilst those circumstances differ somewhat from Mr Sherriff’s circumstances, the Full Bench decision in Charlton v Eastern Australian Airlines Pty Ltd4 provides some further insight. I note that this decision was reached under a significantly different legislative regime which at that time specifically incorporated a reference to the Termination of Employment Convention. In that matter the Full Bench addressed the history of the provision now known as s.386(2)(c). The Full Bench stated:

“[32] Consistent with the decision in Boo Hwa Chan, a termination of employment occurs when a contract of employment is terminated. This necessarily occurs when the employment relationship comes to an end. However, it can also occur even though the employment relationship continues. Where a contract of employment has been terminated, but the employment relationship continues, this will be because a new contract of employment has come into existence. Therefore, whether the appellant’s demotion involved his employment being “terminated by the employer” within the meaning of s.170CE turns on whether his contract of employment was terminated notwithstanding the continuing employment relationship. This question is answered by reference to general law principles relating to the termination of contracts of employment, unconstrained by the Convention.

[33] The question of when a demotion constitutes a termination of employment within general law principles relating to termination of contracts of employment, unconstrained by the Convention, was given careful consideration by the Full Court of the Supreme Court of South Australia in Advertiser Newspapers Pty Ltd v IRC & Grivell. We respectfully adopt that analysis. Although the decision related to a different statutory context, that context required a consideration of general law principles that are equally applicable in the present case.

[34] Unless the contract of employment or an applicable award or certified/workplace agreement authorises an employer to demote an employee, a demotion, not agreed to by the employee, that involves a significant reduction in remuneration will amount to a repudiation of the contract of employment. If that repudiation is accepted, either expressly or by conduct, then the contract of employment is terminated. If, in such circumstances, the demoted employee then remains in employment with the employer, this occurs pursuant to a new contract of employment in respect of the demoted position. It may be noted that where the employment continues with the employee allegedly acquiescing in a reduction in salary or other terms of employment, difficult questions may arise as to whether the continued employment involves the continuation of the original contract of employment (but with the employer breaching that contract by paying the reduced salary), a consensual variation of the terms of the original contract or the termination of the original contract and a substitution of a new contract of employment.” (references removed)

[17] I do not think that this can be said to apply to Mr Sherriff’s circumstances for the reasons I have set out below.

[18] There is no argument that Mr Sherriff has continued to receive the same base wage rate previously applicable to him. It may well be the case that he has not received overtime payments but I do not consider that overtime allocation arrangements can be defined as remuneration in these circumstances. Consequently, the only basis upon which Mr Sherriff could argue that his circumstances are consistent with s.386(2)(c) goes to the nature of the duties allocated to him. Mr Sherriff was removed from driving duties sometime in 2013 after an earlier incident. This was not then argued to mean that he was dismissed. I have accepted Mr Sherriff’s advice that after he was told, on 30 June 2015, that he would never be allocated driving duties, he continued to work as directed but asked his union if that was “fair”. There is nothing to indicate to me that Mr Sherriff confirmed to Veolia that he regarded his employment contract to be at an end. Further, Mr Sherriff’s advice is that his union then addressed the matter with Veolia. The meeting of 9 July 2015 appears consistent with the Agreement dispute resolution provisions. That dispute resolution process then provides the capacity for an unresolved issue to be referred to the Fair Work Commission for determination and Mr Sherriff has conceded that this option was, and remains open to him. Consequently, absent any clear articulation of Mr Sherriff’s position such that he accepted that the removal of driving duties represented some form of repudiation of the employment contract, and left the employment, Mr Sherriff’s circumstances simply appear to be consistent with other employees who may dispute all, or the nature of some of the duties, allocated to them. Unless there is clear evidence of acceptance of the repudiation of employment contract by an employee, a dispute over the allocation of duties is a matter which should be resolved by the parties or, if this is not possible, through determination under the appropriate industrial instrument. Whether that determination ultimately gives rise to the capacity to pursue an unfair dismissal application may be a different issue.

[19] There seems to me to be nothing inherently unlawful about allocating alternative duties to Mr Sherriff. Whether particular job descriptions or particular circumstances warrant or permit the allocation of those duties under the Agreement is a matter which can and should be determined under that Agreement. A conclusion that those revised duties are permitted under the Agreement would then leave Mr Sherriff able to decide if he wished to accept those duties or leave his employment. An alternative arbitration conclusion would then require Veolia to amend the duties allocated to Mr Sherriff. If Veolia refused to make such a change, Mr Sherriff’s employment might then be argued to have been terminated. In either event, conclusions reached under the provisions of the Agreement must remain predicated on Mr Sherriff being regarded as a continuing employee at the present time. The use of the unfair dismissal jurisdiction to determine, at this stage, a dispute over the allocation of duties to Mr Sherriff appears inherently inconsistent with the plain words of s.386(2)(c). Where an employee remains as such and the capacity exists for resolution of a disagreement over the duties allocated to that employee, the concept of repudiation of the employment contract appears inherently difficult to invoke.

[20] Mr Sherriff may have remained employed with Veolia reluctantly, but there is nothing unique or extraordinary about that. The plain provisions of s.386(2)(c) indicate that he has not been dismissed at the present time.

[21] Consequently I have concluded that it may be arguable that there was a significant reduction in Mr Sherriff’s duties. It is not necessary at this stage that I determine whether that reduction was significant because that can, and should be, determined under the Agreement dispute resolution provisions. Mr Sherriff was not dismissed. Had he not remained at work, a different conclusion may have been open to me. On the facts asserted by Mr Sherriff, he has not elected to bring the employment contract to an end and has not been dismissed at the present time.

[22] Section 385 states:

“385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.”

[23] Mr Sherriff cannot be unfairly dismissed if his circumstances do not meet the definition of “dismissed”. In this situation I am not satisfied that there is any capacity for him to pursue this application further. The application is dismissed on this basis. An Order (PR572631) to this effect will be issued.

Appearances:

A Wright counsel for the Applicant.

S Bakewell counsel for the Respondent.

Hearing details:

2015.

Adelaide:

October 6.

 1 [2010] VSC 9 (29 January 2010)

 2   [2011] FWAFB 3769

 3   [2014] FWC 2011

 4 (2006) 154 IR 239

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