Philip Moyle v MSS Security Pty Ltd

[2016] FWCFB 372

[2015] FWC 8330 [Note: An appeal pursuant to s.604 (C2015/7670) was lodged against this decision - refer to Full Bench decision dated 3 February 2016 [[2016] FWCFB 372] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Philip Moyle
v
MSS Security Pty Ltd
(U2015/12036)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 8 DECEMBER 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 29 September 2015 United Voice lodged an application on behalf of Mr Moyle pursuant to s.394 of the Fair Work Act 2009 (the FW Act). The application advised that Mr Moyle had been dismissed by MSS Pty Ltd (MSS), when he was relocated to a different site and advised of a reduction in his salary and classification. The application contended that the employment termination took effect from 9 September 2015.

[2] In its Employers Response (Form F3) MSS contended that Mr Moyle had not been dismissed and remains an employee. Furthermore, the MSS position was that there was no significant reduction in remuneration and that, at the time the application was lodged, Mr Moyle remained classified at the same level as a consequence of a request to this effect made by United Voice.

[3] Mr Moyle’s application was referred to me for determination. It was the subject of a Determinative Conference on 4 December 2015. Both parties provided submissions and material in support of their respective positions. Ms Smith, of United Voice represented Mr Moyle. Ms Jansen represented MSS.

Background Facts relevant to whether Mr Moyle was dismissed

[4] Mr Moyle commenced employment with MSS in 2013. He was classified as a Level 5 Security Officer under the Security Services Industry Award 2010 (the Award) and worked at the Lyell McEwin Hospital.

[5] On 28 August 2015, MSS advised Mr Moyle that he would be transferred to either the Royal Adelaide Hospital or James Nash House. These transfer arrangements involved differing shifts. The MSS position is that the transfer arrangements reflected an ordinary and customary practice within its business and involved a number of its personnel. I note that this issue is disputed between the parties. I also note that MSS assert that the transfer was not a performance-based decision. Mr Moyle’s position is that this change constituted a demotion such that his employment was terminated.

[6] On 1 September 2015 Mr Moyle advised that he preferred the James Nash House site. He was then provided with a roster commencing on 9 September 2015. Mr Moyle has continued to work in accordance with those rostering arrangements.

[7] Mr Moyle expressed concern about what he regarded as a demotion to United Voice. On 18 September 2015 United Voice wrote to Ms Jansen of MSS on behalf of Mr Moyle and expressed concern over the extent to which MSS had properly consulted in this matter. This correspondence confirmed that Mr Moyle was willing to move to James Nash House but required that MSS attempt to “mitigate the adverse effects of a change in grade.” 1 This correspondence advised that, if MSS did not respond or do not consider Mr Moyle’s request, an unfair dismissal claim might be pursued.

[8] MSS responded to this correspondence on 23 September 2015 and advised that it would continue to pay Mr Moyle at the Level 5 classification until 4 October 2015. This advice 2 also confirmed that MSS refused to mitigate the loss of night shift loadings as it asserted that Mr Moyle “had the choice to continue working on a day/night shift roster and made the decision to move to a day shift only roster for personal reasons.”3

[9] Mr Moyle has continued to work for MSS at James Nash House. He has been paid at the Level 3 rate. The Award Level 5 rate is $21.33 per hour and the Award Level 3 rate is $20.32 per hour.

The Jurisdictional issue

[10] The initial issue goes to whether or not Mr Moyle has been dismissed. Section 385 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.”

[11] Mr Moyle’s position was that the decision to reduce his classification from Level 5 to Level 3 and to allocate him to a roster which did not involve the same level of night shift work constituted a dismissal and that his current position represents substantially different and reduced duties. Mr Moyle’s submission was 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 so that he was able to pursue an application of this nature. Mr Moyle’s evidence was that:

“I am of the view that my demotion was unfair. I have lost remuneration and I have lost all my supervisory duties. There was nothing I did that was wrong.” 4

[12] The MSS position was that the change in Mr Moyle’s allocated duties did not represent a significant reduction in duties given the terms of the Award and the conditions under which he worked. MSS asserted that the reduction in remuneration and changing classification could not be regarded as significant. Further, MSS asserted that the loss of shift loadings previously applicable to Mr Moyle reflected his decision not to pursue a work allocation which brought with it the same shift arrangements that previously applied. Finally, MSS asserted that, because Mr Moyle remains an employee, he has not been dismissed so that the Fair Work Commission (the FWC) lacks the jurisdiction to further consider the application. By extension, MSS contended that any residual concerns which Mr Moyle may have about the work allocated to him, his classification and/or access to shift loadings should be addressed consistent with the dispute resolution provisions (clause 9) of the Award.

The Evidence

[13] Mr Moyle’s evidence went to the circumstances of the commencement of his employment and the extent to which, until 9 September 2015, he understood he was classified as a Level 5 Security Officer under the Award and was a Team Leader. Mr Moyle detailed his understanding of the MSS transfer requirements and the limited choice given to him in this respect. He detailed the basis upon which he sought to dispute this issue in the following terms:

“On 28 August 2015 I attended the second day of the two day training. I met with Service Support Manager, Mr Mick Leet and Ms Jansen. In this meeting, Ms Jansen said words to the effect, “you will be transferred to a different worksite, you may transfer to either the Royal Adelaide Hospital or James Nash House. The move will involve a transfer to Level 3: I cannot recall the exact conversation however the reason given for the transfer was that it was a result of the customary and ordinary turnover of staff. I asked, “could I take time to consider this?”. I was given 7 days to make the decision.

On Monday 31 August 2015 I contacted Mr Marthenis via telephone. I cannot recall precisely what I said but I contacted him with the intention of advising him of my option and said words to the effect that, “I will move to James Nash House”.

On the same day I contacted United Voice and spoke with Member’s Rights Centre Official Bronwen Davies regarding the demotion. I asked what I could do. I was advised to speak with my employer about what steps they intended to take to mitigate my loss.” 5

[14] In his evidence, Mr Moyle acknowledged that he had agreed in 2010, 2012 and 2015 with the Security Officer Standing Instructions which detailed rules, policies and procedures. 6

[15] Mr Marthenis is the Business Manager (Healthcare Services) for MSS. His evidence went to common arrangements for the transfer of employees and payment arrangements in these circumstances. His evidence was that SA Health Management had requested that security employees be rotated so as to be exposed to different environments within health. 7

[16] Mr Marthenis’ evidence was that Mr Moyle was given two options for transferred working arrangements and was transferred to his preferred location which involved reduced shiftwork opportunities. Following correspondence from United Voice, Mr Marthenis agreed to pay Mr Moyle at the Level 5 for a further month to assist him with the transition of pay rate.

Findings

[17] 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.⁸

[18] The Full Bench decision in Charlton v Eastern Australian Airlines Pty Ltd⁹ provides some further insight. I note that this decision was reached under a 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 what is now 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)

[19] I do not think that Mr Moyle was dismissed for the reasons I have set out below.

[20] I have discounted the loss of shift premiums as a relevant factor in that this reflected Mr Moyle’s preference to undertake work at James Nash House knowing that it involved reduced shiftwork. The evidence of Mr Marthenis was not disputed by Mr Moyle. Mr Marthenis’ evidence was that:

“On the 28th August 2015 I requested by Service Support Manager, Mick Leet, speak to Phil Moyle and advised him that he had been selected for site transfer as per the memo distributed on 29th July 2015. (sic)

I asked him to provide Phil Moyle with two options of roles to transfer to; one being at The Royal Adelaide Hospital, with a continuing roster patter as he had been working, of 2 days then 2 nights on, followed by 4 days off. The second option being a role at James Nash House, which also has a roster of 4 days on, 4 days off, however no night shift is included in this role.” 10

[21] Mr Moyle’s evidence was that he agreed that he elected to transfer to James Nash House. 11 Under the Award, shift premiums are payable with respect to designated shifts which can only apply where an employee’s working arrangements establish an entitlement to those shift premiums.

[22] Since 4 October 2015 Mr Moyle has received a base wage rate which is approximately $1 per hour less than that which previously applied. I do not consider that this reduction in remuneration can be regarded as significant for the purposes of s.386(2)(c)(i). That reduction amounts to less than 5%.

[23] In terms of the duties undertaken by Mr Moyle, there is nothing in the employment arrangements under which Mr Moyle was engaged which determined that he was specifically engaged at a given classification level. Further I do not consider that there is anything in the Award that requires that Mr Moyle must be paid as a Level 5, having been so classified at a particular site. Clause 13.1 of the Award states:

“13. Classifications

13.1 Classifications are set out in Schedule C—Classifications. An employee performing work falling within the classification descriptions in Schedule C must be employed in a classification in Schedule C.”

[24] The Award classification descriptors define the various different levels, and particularly Levels 3-5 on the basis of the specific tasks undertaken. I do not consider that there is anything in the Award which prohibits MSS from classifying Mr Moyle at a lower level if this reflects the position requirements. In this respect, Mr Moyle’s position is analogous to the circumstances considered by a Full Bench in Gorczyca v RMIT University. 12

[25] In terms of the duties associated with Mr Moyle’s work at James Nash House, I have noted that the Level 5 classification description specifically stipulates that a Security Officer Level 5 may be required to perform the duties of security officers at Levels 1, 2, 3 and 4 provided that such duties are not designed to promote deskilling. 13 Further, Mr Moyle acknowledged14 that he had endorsed the various iterations of the Security Officer Standing Instructions. There was no dispute that these instructions refer to Transfer, Location and Classification in the following terms:

“a. Section 7.5.2 Transfer, Location and Classification

b. As an employee of MSS Security, you are employed as a condition of employment to perform a wide range of duties at any site at which MSS Security has a contract to provide services. The business for MSS Security depends on the hold and performance of such contracts.

c. Your rate of pay and conditions as an employee shall be those applying to the duties you perform from time to time and may change according to your new assignments.

d. Section 1.14 Work as Directed.

e. Provided they are qualified and trained to perform the required duties, employees will accept any work assignment offered to satisfy MSS contractual obligations. They must be prepared to work at any MSS or client’s premises, sites, or place of duty as may be directed by MSS management.” 15

[26] In this context I am not satisfied that the allocation of Level 3 duties to Mr Moyle can be properly described as a significant reduction in his duties. It simply involves the allocation of security officer work which does not meet the definition set out for Level 5.

[27] I have adopted the approach set out in Whittaker v Unisys Australia Pty Ltd¹⁶ where 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)

[28] I note at the outset that Mr Moyle’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.

[29] I have accepted Mr Moyle’s advice that, on 4 September 2015 he asked United Voice to dispute his demotion and request mitigation of his losses. 17 There is nothing to indicate to me that Mr Moyle confirmed to MSS that he regarded his employment contract to be at an end. His evidence was that:

“I moved to James Nash House on 9 September 2015. I have performed duties as a team member within the Level 3 classification since this time.” 18

[30] Further, I am not satisfied that Mr Moyle actually specified a form of protest to MSS relative to either his classification, his pay or his duties. His evidence was that he raised various issues with MSS management on 27 August 2015 but did not protest at his transfer arrangements. 19 To the extent that Mr Moyle agrees that he raised a protest relative to his employment arrangements with United Voice, the correspondence sent to MSS on his behalf20 refers to an allegation that the circumstances of Mr Moyle’s transfer and pay reduction “may constitute a termination of our members’ employment”. This same correspondence requests that “MSS attempts to mitigate the adverse effects of a change in grade.” MSS responded to this correspondence and agreed to maintain Mr Moyle’s hourly rate for a further four weeks. There is nothing to indicate that Mr Moyle regarded himself as dismissed. He has continued to work and the MSS position is that it only became aware of his position that he had been dismissed when it received this application. Consequently, notwithstanding that I do not consider that the employment contract had been repudiated by MSS, there is no evidence that Mr Moyle regarded his employment as having been terminated in any event.

[31] The Award dispute resolution provisions (Clause 9) provide the capacity for a dispute relative to inappropriate classification levels to be addressed. That dispute resolution process then provides the capacity for an unresolved issue to be referred to the Fair Work Commission. I consider that this option was, and remains open to Mr Moyle. Indeed, it is consistent with his view that his demotion was unfair 21 as distinct from articulation of an opinion that this demotion severed the employment relationship. Absent any clear articulation of Mr Moyle’s position such that he regarded the work and site reallocation represented some form of repudiation of the employment contract, and consequently left MSS’s employment, Mr Moyle’s circumstances simply appear to be consistent with other employees who may dispute all, or the nature of some of the duties, or pay rates 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.

[32] The use of the unfair dismissal jurisdiction to determine, at this stage, a dispute over the allocation of duties to Mr Moyle 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.

[33] Mr Moyle may have remained employed with MSS 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.

[34] Given the conclusions I have reached in this respect it is not necessary that I give further consideration to the extent to which, at the time the application was made Mr Moyle was still in receipt of his Level 5 classification rate of pay. In Mihajlovic Lifeline Macarthur 22 a Full Bench determined that there was a discretion available to the FWC to accept an unfair dismissal application made before and employment termination took effect. In this instance I do not consider that employment termination took effect at all so that the question of an exercise the discretion to accept a premature unfair dismissal application simply does not arise in these circumstances.

[35] Consequently I have concluded that Mr Moyle has not been dismissed.

[36] 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.”

[37] Mr Moyle 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 (PR574621) to this effect will be issued.

Appearances:

L Smith for the Applicant.

R Jansen for the Respondent.

Hearing details:

2015.

Adelaide:

December 4.

 1   Exhibit A1, Annexure A

 2   Exhibit R2, Attachment 6

 3   Exhibit R2, Attachment 6

 4   Exhibit A2, para 18

 5   Exhibit A2, paras 11 - 13

 6   Transcript sound recording, 10:48 am, 4 December 2015

 7   Exhibit R2, para 9

8 [2011] FWAFB 3769

9 (2006) 154 IR 239

 10   Exhibit R2, paras 12 and 13

 11   Exhibit A2, para 12

 12   PR922414, 12 September 2002

 13   Security Services Industry Award 2010, Schedule C

 14   Transcript sound recording, 10:48 am, 4 December 2015

 15   Exhibit R1, para 34

16 [2010] VSC 9 (29 January 2010)

 17   Exhibit A2, para 15

 18   Exhibit A2, para 16

 19   Transcript sound recording, 10:42 am, 4 December 2015

 20   Exhibit R3, Attachment 5

 21   see Exhibit A2, para 18

 22   [2014] FWCFB 1070

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<Price code C, PR574620>