Kevin Powell v Department of Economic Development, Jobs, Transport and Resources (until recently Department of Transport Planning and Local Infrastructure)

[2016] FWC 2397

[2016] FWC 2397

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Kevin Powell
v
Department of Economic Development, Jobs, Transport and Resources (until recently Department of Transport Planning and Local Infrastructure)
(U2015/16532)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 28 APRIL 2016

Application for relief from unfair dismissal.

[1] Mr Kevin Powell alleged that the termination of his employment by the Department of Economic Development, Jobs, Transport and Resources was unfair.

[2] The Department objected to Mr Powell’s application because it submitted that Mr Powell was not dismissed. Alternatively it submitted that if Mr Powell was dismissed, the dismissal took effect on 17 November 2014 and that Mr Powell’s application was not lodged until 4 December 2015. It submitted that there were no exceptional circumstances which would warrant granting Mr Powell an extension of time to lodge his application.

Permission to appear

[3] I granted permission to the Department to be represented by a lawyer. I accept that the issues raised, in particular whether there was a dismissal, involved some complexity and legal representation would enable the matter to be dealt with more efficiently.

Background

[4] From July 2013 Mr Powell was employed as Specialist Procurement Advisor, VPS 6.2. His terms and conditions of employment were regulated by the Public Administration Act 2004 (Vic) and the Victorian Public Service Workplace Determination 2012. 1

[5] In 2014 the Department introduced a proposal to make changes to a number of areas including the Finance Group to which Mr Powell was assigned. 2 The Department notified the affected employees and the CPSU. It was proposed that there would be a reduction in the number of VPS grade 6 procurement roles from three to one. The CPSU and Mr Powell submitted alternative proposals. However those proposals were not accepted.

[6] The Department decided that rather than follow the redeployment policy it was decided to implement a “remobilisation strategy”. This was considered to be an additional step prior to the three month redeployment period mandated in the Determination. 3 A document explaining the consolidation of the Finance Group4 described it as follows:

“Our aim is to ‘remobilise’ staff. Remobilisation is about placing people into roles commensurate with their skills, knowledge, experience and remuneration. PWS will work closely with individuals to help source a job that is appropriate. People will be given meaningful work during this period until an appropriate job is sourced. Redeployment will occur as an absolute last resort after all opportunities have been exhausted. Any people who have not been able to be placed successfully in a job will enter the redeployment process. Further information regarding redeployment is available in the DTPLI Redeployment Policy.” 5

[7] Following consultation with staff and the CPSU the change was implemented on 26 May 2014.

[8] Staff who were affected by the changes could either be:

(a) Matched to a position as the job remained relatively unchanged and only one person was doing the job.
(b) Invited to participate in a closed expression of interest process where there were more than one person doing a similar job or functions in the same classification.
(c) Not matched because the position had significant change and was now a new job or no longer required in the proposed structure. 6

[9] Mr Powell participated in a closed EOI process but was not successful in obtaining a position. As a result Mr Powell became unattached. 7

[10] Mr Powell was then placed in a temporary job in the Finance Group for three months. Mr Powell complained that he ended up doing meaningless work in this position. 8 He also said that no effort was made to find him another position commensurate with his skills, knowledge, experience and remuneration.

[11] Subsequently on 21 November 2014, Mr Powell was offered a position as a Senior Procurement Advisor at VPS Grade 5.2. 9 On 27 November 2014, Mr Powell accepted the offer.10 As Mr Powell accepted a position at a lower classification he was entitled to salary maintenance for 12 months.

[12] Mr Powell said that “when it became evident that [he] was trapped in the Procurement Unit and that [he] would be retrenched when the VPS5 positions which had been advertised were filled, and [he] had no prospect of alternative employment at this time [he] was compelled to accept under protest one of the VSP 5 positions for financial reason.” 11

[13] The issues to be determined:

1. Was Mr Powell’s ‘demotion’ authorised by the Determination?

[14] The Department submitted that a demotion authorised or permitted by an employment contract or a certified industrial instrument and will not constitute a termination or dismissal at general law or for the purpose of s.386(1)(a) of the Fair Work Act 2009. 12 It submitted that the movement of Mr Powell from the VPS 6.2 position to the VPS 5.2 position was a legitimate outcome authorised and facilitated by the Schedule A of the Determination. Accordingly, it submitted that Mr Powell was not dismissed.

[15] However the flaw in this submission is that Mr Powell was not moved from the VPS 6.2 position to the VPS 5.2 position in accordance with Schedule A of the Determination. The move occurred as a part of the remobilisation process which, as the Department explained, was a precursor to redeployment.

[16] Further, while the redeployment process contemplates employees taking up lower paid positions there is nothing in Schedule A of the Determination that entitled the Department to demote an employee against his or her will. Further, the Department did not submit that Mr Powell’s contract of employment authorised his demotion. I therefore reject the Department’s contention that this was not a dismissal because it was authorised by the Determination.

2. Was Mr Powell demoted?

[17] It is not contested that the VPS 5.2 position involves a significant reduction in pay. An employee may be dismissed for the purposes of the Act if they are demoted.

[18] However as was said in Charlton v Eastern Australian Airlines Pty Ltd: 13

“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.” 14

[19] The key words are of course “not agreed to by the employee.”

[20] In this matter I am unable to conclude that Mr Powell was demoted without his consent.

[21] While there is a dispute between the parties about whether Mr Powell applied for the VSP 5.2 position, there is no dispute that an offer was made to him and he accepted the offer. It was Mr Powell’s unchallenged evidence that he was offered the VPS 5.2 position when he was unsuccessful in obtaining the VPS 6 position. 15

[22] Mr Powell said the CPSU in May 2014 challenged the decision to continue the restructure of the Senior Procurement Advisor position. He provided an alternative proposal to the Department. In August 2014, he sought redeployment and a separation packaged as per the Determination but was told it was not available. 16

[23] He refused the offer of one of the downgraded positions. Mr Powell then accepted the offer of the new position on 27 November 2014.

[24] He contacted the relevant person at the Department’s People & Workplace Services on 17 February 2015 to get advice about lodging a grievance. In March 2015, he applied for reclassification of the position and lodged a grievance on 26 June 2015. In March 2016, the CPSU lodged a dispute with the Commission over the decision not to reclassify the position. 17

[25] Mr Powell said he did not voluntarily accept the offer of the VPS5 position. He said he protested the demotion of his position in the restructure and the subsequent contract of employment. He only accepted it for financial reasons. 18 Mr Powell does not say what steps he took at the time he was offered the contract to protest the demotion. He did not at the time advise in writing that he signed the contract under protest or duress. He did not give evidence that he orally informed the Department at the time of the offer that he only accepted it under protest or duress.

[26] There was no evidence that Mr Powell was told that if he did not accept the offer, he would be demoted to the position. That option was not available to the Department under the Determination.

[27] He was aware that if he did not accept the position then he would be retrenched. That he was able to reject an offer of a lower classified position is evidenced by the fact that he had already rejected one such offer.

[28] In fact, Mr Powell knew that if he did not accept any offer then the redeployment process of the Determination would apply. I accept Mr Powell’s evidence that by this time, this was no longer what he wanted to happen, but that is not a relevant consideration. That Mr Powell faced financial pressure to maintain his employment did not mean he did not have a choice it just meant the choice was not palatable. I therefore find that Mr Powell was not demoted by the Department and hence there was no dismissal at the initiative of the Department.

3. When did the demotion take effect?

[29] If I am wrong in relation to this and Mr Powell was dismissed at the initiative of the Department, when he was placed in the VPS 5.2 position on 27 November 2014, his application for an unfair dismissal remedy was not lodged until 4 December 2015, the question then is when did the demotion take effect?

[30] Mr Powell submitted that the demotion did not take effect until his salary was actually reduced at the end of the period of salary maintenance. I do not accept this submission. Mr Powell’s letter of offer made it clear that salary maintenance would be in place for 12 months and at the end of this period his salary would revert to a VPS Grade 5.2. However his substantive position was the VPS Grade 5.2 and the substantive salary was that of a VPS 5.2. As a result when he took up this position the demotion was effected.

[31] If the demotion was a dismissal that dismissal took effect on 27 November 2014. As such Mr Powell did not lodge his application within 21 days of the date of the dismissal.

4. Should Mr Powell be granted an extension of time?

[32] The Commission can extend time for the lodging of an unfair dismissal application if it is satisfied that there are exceptional circumstances. In assessing whether there are exceptional circumstances the Commission must have regard to certain matters. Only if it is satisfied that there are exceptional circumstances can it then exercise its discretion to decide whether to extend time.

[33] The meaning of "exceptional circumstances" was considered in Nulty v Blue Star Group Pty Ltd 19 where the Full Bench said:

“In summary, the expression "exceptional circumstances" has its ordinary meaning and requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe "exceptional circumstances" as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural "circumstances" as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of "exceptional circumstances" includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon.”

[Endnotes not reproduced]

The reason for the delay: s.394(3)(a)

[34] Mr Powell said that he did not know he had been dismissed. Mr Powell said he did not lodge his application because he understood that the demotion did not take effect until the salary maintenance period expired. There is no evidence that Mr Powell sought advice either from his union or any other party on this issue. Mr Powell’s understanding was incorrect. Mr Powell submitted that he disputed the decision to demote him which suggests he was aware that it occurred prior to the date the salary maintenance ceased. Those steps were taken in February and March 2015.

[35] The Department submitted that Mr Powell has a sophisticated understanding and awareness of his rights and it rejects the suggestion that because he had other matters on foot, he was unable to lodge an application for unfair dismissal.

[36] It submitted that Mr Powell voluntarily accepted the VPS 5.2 role, with the 12 month salary maintenance, in November 2014. Further, it submitted if that if his demotion is deemed a dismissal, that Mr Powell is significantly out of time as his dismissal occurred at the time he accepted that role. The Department says that while Mr Powell has not exhausted all avenues, it is because he did not get what he wanted from those avenues, it is now responding to an unfair dismissal application.

[37] I am not satisfied that it was reasonable for Mr Powell to wait until his salary maintenance ceased to lodge his application. This weighs against a finding that there are exceptional circumstances.

Whether Mr Powell first became aware of the dismissal after it had taken effect: s.394(3)(b)

[38] Mr Powell was aware of the demotion when it took effect. This weighs against a finding that there are exceptional circumstances.

Any action taken by Mr Powell to dispute the dismissal: s.394(3)(c)

[39] Mr Powell disputed the decision to abolish his substantive position both before the decision was finalised and after it was effected. He continues to dispute the decision. This weighs in favour of a finding that there are exceptional circumstances.

Prejudice to the employer (including prejudice caused by the delay): s.394(3)(d)

[40] No evidence was called of any prejudice to the Department if an extension of time were granted.

[41] This weighs in favour of a finding that there are exceptional circumstances.

The merits of the application: s.394(3)(e)

[42] Mr Powell submitted that his VPS 6.2 position was not genuinely redundant. He submitted that the Department is requiring him to do the same work that he did prior to the restructure but at a lower rate of pay. The Department submitted that the restructure was genuine and it rejects Mr Powell’s contentions.

[43] It was further submitted that there are difficulties in the relief sought by Mr Powell namely, a reclassification of the VPS 6.2 role in addition to compensation for stress. The Department contended that such compensation cannot be awarded under the unfair dismissal regime. Lastly, it also says that Mr Powell’s claim does not fall within the unfair dismissal framework.

[44] I am not able to make a final assessment of the merits as there are factual disputes between the parties that have not been tested. I consider this criterion to be neutral.

Fairness as between Mr Powell and other persons in a similar position: s.394(3)(f)

[45] There were no submissions that there were any persons in a similar position.

Conclusion

[46] I am not satisfied that there are exceptional circumstances. Mr Powell has not provided a reasonable explanation for the delay. Further none of the other criteria are sufficient to support such a finding.

[47] As I have found that Mr Powell was not dismissed he was not protected from unfair dismissal. Even if I had found he was protected from unfair dismissal, I have determined that the dismissal took effect on 27 November 2014 and Mr Powell did not lodge his application within 21 days of the date of the dismissal. I have also determined that there are no exceptional circumstances warranting the ordering of an extension of time for Mr Powell to lodge his application. Therefore Mr Powell’s application for an unfair dismissal remedy is dismissed.

DEPUTY PRESIDENT

Appearances:

Mr K Powell representing himself.

Ms C Symons representative for the Respondent.

Hearing details:

2016.

Melbourne;

March 21.

 1   PR526534.

 2   Exhibit R1 at 8-9.

 3 Exhibit R1 at [7].

 4   Ibid at AB3.

 5   Ibid at 19.

 6 Exhibit R1 at [12].

 7   Ibid at [13]-[14].

 8 Exhibit A2 at [8].

 9   Exhibit R1 at AB9.

 10   Ibid.

 11 Exhibit A2 at [14].

 12 Submissions of the Respondent at [25].

 13 (2006)154 IR 239.

 14 Ibid at [34].

 15 Exhibit A2 at [15].

 16   Ibid at attachment 3.

 17 Exhibit A2 at [15].

 18   Ibid.

 19   [2011] FWAFB 975 at [13].

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