DECISION NO: 403/96 C A T C H W O R D S INDUSTRIAL LAW - termination of employment - demotion - whether constitutes termination of employment Industrial Relations Act 1988 ss.170EA CASES: Strachan v Liquorland (Australia) Pty Ltd IRCA (unreported) 6 February 1996, NI-1266R/1995, Decision No 48/96 Grout v Gunnedah Shire Council (1994) 1 IRCR 143 at 160 Brackenridge v Toyota Motor Corporation (IRCA) Beasley J (unreported) NI-1218 of 1995, 19 April 1996, Decision No. 162/96 GILES -v- AUSTRALIAN PERSONNEL SOLUTIONS PTY LTD No. VI-1686 of 1996 Before: Ryan JR Place: Melbourne Date: 16 August 1996 INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI-1686 of 1996 B E T W E E N : STELLA PATRICIA GILES Applicant AND AUSTRALIAN PERSONNEL SOLUTIONS PTY LTD Respondent MINUTES OF ORDERS Judicial Registrar Ryan 16 August 1996 THE COURT ORDERS: 1. That the application be dismissed. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules. INDUSTRIAL RELATIONS COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VI-1686 of 1996 B E T W E E N : STELLA PATRICIA GILES Applicant AND AUSTRALIAN PERSONNEL SOLUTIONS PTY LTD Respondent Before: Ryan JR Place: Melbourne Date: 16 August 1996 REASONS FOR JUDGMENT This is an application for reinstatement by way of a claim of unlawful termination of employment. The application was lodged in the Australian Industrial Relations Commission on 8 May. A conciliation conference was held on 4 June and the matter was referred unresolved to the Court on 5 June. The Respondent asserts the Applicant was employed until 18 July and that there is no valid claim of unlawful termination of employment before the Court. Counsel agreed to resolve the preliminary issue of jurisdiction and no evidence was called. Counsel for the Respondent accepted and agreed with a summary or statement of facts delivered orally by Counsel for the Applicant. It is not necessary to detail in this judgment all of the agreed facts. They are recorded and could be produced in transcript later should that be necessary. Among the agreed facts are the following: · the Applicant was employed as a customer service/consultant on 18 April 1995 under contract of employment of that date and a copy of the contract and a job description form were tendered as Exhibits as A2 and A3 respectively · on 1 February 1996 the Applicant was promoted to a full-time position of Branch Manager. A job description was tendered as Exhibit A4 · in late March two supervising members of the Respondent company, Ms Hall and Mr Barnson discussed with the Applicant perceived performance problems · in April the Applicant lodged a WorkCare claim for an injury to her right foot · the Applicant was certified as unfit for work from 15 to 19 April and from 19 to 30 April · on 22 April Ms Hall told the Applicant that she would be demoted to a position of consultant · the Applicant indicated that she did not accept the demotion and would seek advice. Ms Hall indicated that the decision had been made and was not negotiable · the Applicant was initially certified as unfit for work from 1 May to 15 May but attended at work on 2 May acting on the advice of a surgeon · on 8 May the Applicant produced to the Respondent a certificate which indicated that the Applicant was fit to work four hours a day, five days a week from 30 April to 30 June · on 6 June the Applicant's solicitors wrote to the Respondent indicating that the Applicant was prepared to return to work on light duties four hours a day "without prejudice" to her rights under her claim of unlawful termination of employment · the letter included the following: "our client has only agreed to return to work on light duties so as to protect her entitlement to WorkCover benefits. Immediately upon her being certified as fit to return to normal duties, she will expect to be reinstated as Branch Manager, failing which she will continue to seek the appropriate remedies" · on 7, 11, 12 and 13 June the Applicant worked at the Respondent's Yarraville office four hours a day doing reference checks · the Applicant was certified as unfit for work from 14 to 19 June and underwent surgery to her right foot or ankle on 19 June · the Applicant's solicitors advised the Respondent through their solicitors on 12 July that the Applicant would be fit to return to full-time employment on 22 July and "expects to be reinstated as Branch Manager at your Reservoir offices upon her return to work" · on 14 July the Applicant provided a certificate that she was unfit for work from 6 July to 21 July · on 16 July the Respondent's solicitors advised the Applicant's solicitors that a full clearance certificate had not been received from the Applicant's treating doctor and that the Respondent "would be unable to act (on re-employment) until (a clearance) was received". The letter concluded as follows: "in any event your client will not be reinstated as Branch Manager at the Reservoir office. This issue is the subject matter of the dispute which is to be heard in the Industrial Relations Court and our client maintains its position" · on 16 July the Applicant's solicitors are stated to have foreshadowed resignation and on 17 July wrote to the Respondent's solicitors advising that the Applicant "has no alternative but to resign from your client's employ with immediate effect" · by letter dated 18 July the Applicant wrote to Ms Clementson (presumably an employee of the Respondent). The first paragraph of the Applicant's letter reads as follows: "in view of the third paragraph of the letter dated 17 July 1996 from your Solicitors to my Solicitors stating that I will not be re-instated to the position of Branch manager at the Reservoir office I hereby advise you that I have no alternative but to resign from your employ, with immediate effect." On 6 February 1996 Moore J considered whether demotion of an employee who remained in employment constituted termination of employment: Strachan v Liquorland (Australia) Pty Ltd IRCA (unreported) 6 February 1996, NI-1266R/1995, Decision No 48/96, His Honour reviewed the Convention concerning Termination of Employment at the initiative of the employer (Schedule 10) and the Recommendation concerning Termination of Employment at the initiative of the employer (Schedule 11) and Division 3 to determine what is comprehended by the expression "termination of employment". At 8 he stated: "Many of the provisions of the Convention and the Recommendation would have a rational operation if the expression "termination of employment" was treated as comprehending a situation where an employee was, in essence, required to accept employment in a position materially different to the one then occupied at a materially lower salary. If the Convention as a whole and the Recommendation as a whole would sustain such a construction of the expression "termination of employment" then it would give its provisions, as imported into Division 3 of Part VIA of the Act, a wide operation. It would be a construction given the legislation a broad beneficial effect: see Grout v Gunnedah Shire Council (1994) 1 IRCR 143 at 160. However both the Convention and Recommendation contain provisions that suggest that the expression "termination of employment" has no application to such situations." His Honour expressed the view that Article 12 of the Convention and Recommendations 18 to 26 "provide a relatively clear indication of the intended scope of these international instruments in their entirety. They concern the loss of employment by an employee. They are not intended to relate to the demotion of an employee who remains in employment with the same employer. There is nothing in the Act...which suggests the expression should have some other meaning in the Act, and in S170EA in particular, notwithstanding the provisions of S170CB." His Honour did not deal with submissions at common law as to whether certain events in Strachan led to a termination of the subsisting contract of employment. He stated at 10: "In view of the conclusion I have reached about the meaning, in context, of the expression "termination of employment" it is unnecessary for me to do so." Strachan was followed in Brackenridge v Toyota Motor Corporation (IRCA) Beasley J (unreported) NI-1218 of 1995, 19 April 1996, Decision No. 162/96. Counsel for the Applicant seeks to distinguish Strachan and points out that in that case Mr Strachan did not contest his demotion for many months and specifically accepted the demotion until after he had earned particular long service leave entitlements. In this case it is clear enough that the Applicant and her solicitors did not accept the demotion and contested it. However, in my view, this is of no avail. Counsel for the Applicant categorises the demotion as a unilateral variation of the contract of employment and that the Applicant treated this repudiation as a termination of the employment contract at the initiative of the employer. I do not accept that categorisation but, even if it be correct, the Applicant did not end the employment relationship and continued in the employment relationship until resignation on 18 July. The Respondent did not act to end the employment relationship on or before the application was lodged in the Australian Industrial Relations Commission on 8 May. The Respondent states that it did not act to end the employment relationship at any time but if it is to be argued that the Respondent did so act there is no substance to any claim that the Respondent ended the employment relationship before 18 July. On the basis of Strachan and Brackenridge I am of the view that this application must be dismissed for lack of jurisdiction. The Respondent seeks costs. I reserve on costs. I have heard both counsel on costs but Applicant's counsel seeks to be heard on the question of costs if I decide to order costs. I have left open the possibility that the parties may be given a further opportunity to address on costs if the Court decides to order costs. MINUTES OF ORDERS THE COURT ORDERS: 1. That the application be dismissed. NOTE: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules. I certify that this and the preceding 4 pages are a true copy of the reasons for judgment of Judicial Registrar Ryan. Associate: Dated: 16 August 1996 Solicitors for the Applicant: Mr R Niall Counsel for the Applicant: Gary Katz & Associates Solicitors for the Respondent: Wisewoulds Counsel for the Respondent: Mr M McDonald Date of hearing: 14 August 1996 Date of judgment: 16 August 1996