Application for an unfair dismissal remedy – jurisdictional objection – whether applicant dismissed – demotion – significant reduction in remuneration – ongoing employment relationship – demotion constitutes dismissal – jurisdictional objection dismissed.

[1] When does a demotion constitute a dismissal within the meaning of s 386 of the Fair Work Act 2009 (Cth) (Act)? That is the primary question to be answered in light of the jurisdictional objection raised by NSW Trains to the unfair dismissal application lodged by Mr Todd James with the Fair Work Commission (Commission).

Summary

[2] Following an investigation into allegations of misconduct, NSW Trains took disciplinary action against Mr James, a Shift Manager who has been employed by NSW Trains and its predecessors for over 30 years, by reducing his grade from Rail Classification (RC) 6 Level E to RC6 Level A and his gross pay from $141,442 to $127,569. NSW Trains thereby demoted Mr James.

[3] Although Mr James does not agree with the unilateral decision by NSW Trains to reduce his grade and pay, he remains employed by NSW Trains in the position of Shift Manager. Neither his duties nor his location of work has changed. The employment relationship is ongoing.

[4] The decrease in Mr James’s gross remuneration by $13,873 per annum involved a “significant reduction in his remuneration” within the meaning of s 386(2)(c)(i) of the Act.

[5] Because Mr James has been demoted in employment and his demotion has involved a significant reduction in his remuneration, he has been dismissed within the meaning of s 386 of the Act, notwithstanding that his employment relationship with NSW Trains is ongoing and has not been terminated and replaced by a new employment relationship. My reasoning and conclusion in this regard is consistent with, and supported by, the following appellate court authorities:

(a) First, the decision of the High Court in Visscher v The Honourable President Justice Giudice (Visscher), 1 where the majority (Heydon, Crennan, Kiefel and Bell JJ) held that “Section 170CD(1B), by implication, treated a demotion as a termination of employment where it involved a significant reduction in remuneration or duties of the employee” [emphasis added]. In the context of a demotion, there is no material difference between s 170CD(1B) of the Workplace Relations Act 1996 (Cth) (WR Act) and s 386 of the Act;2 and

(b) Secondly, a recent decision of the Federal Court of Australia in Broadlex Services Pty Ltd v United Workers’ Union (Broadlex), 3 where Justice Katzmann observed that “para 386(2)(c) necessarily implies that a demotion in employment which involved a significant reduction in the employee’s remuneration or duties is a dismissal although the employee remains in the employer’s employment”.

[6] In my view, single-member decisions of the Commission which are inconsistent with these authorities should…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Todd James v NSW Trains

Details

AGLC: Todd James v NSW Trains [2021] FWC 4733
Case: [2021] FWC 4733
Decision Date: 3 AUGUST 2021

CaseChat Overview and Summary

Todd James, the applicant, sought an unfair dismissal remedy against NSW Trains, the respondent, before the Fair Work Commission. The central dispute arose from a significant demotion that Mr. James experienced, which resulted in a substantial reduction in his remuneration. This event led him to argue that his dismissal was unjust and warranted a remedy. The court had to determine whether Mr. James' demotion constituted a dismissal and whether it had the requisite elements to fall within the commission's jurisdiction.

The primary legal issue was whether the demotion Mr. James faced qualified as a dismissal under the Fair Work Act. The court needed to assess if the demotion effectively severed the employment relationship, considering that Mr. James remained in the respondent's employment. The court also considered whether the significant reduction in remuneration, coupled with the demotion, met the threshold for a dismissal. The central query was whether the nature and effect of the demotion were such that it amounted to a termination of employment.

In resolving these issues, the court examined the statutory provisions and relevant case law concerning dismissals and demotions. It found that the demotion significantly altered the terms and conditions of Mr. James' employment, effectively terminating the relationship as it existed before the demotion. The court held that the substantial reduction in remuneration and the change in job responsibilities were critical factors that indicated a dismissal had occurred. Consequently, the jurisdictional objection was dismissed, affirming that the commission had the authority to hear and determine the merits of Mr. James' unfair dismissal claim.

The court ordered that the objection to its jurisdiction was dismissed, thereby allowing the application to proceed on its merits. This decision enabled the commission to further investigate and rule on the merits of Mr. James' unfair dismissal claim, including whether the dismissal was unfair and if any remedy should be awarded.

Orders