Industrial Relations Commission of New South Wales CITATION: Kaisser v A V Jennings Homes Ltd [2005] NSWIRComm 1221 APPLICANT Timothy Kaisser PARTIES: RESPONDENT A V Jennings Homes Ltd FILE NUMBER(S): 7345 of 2004 CORAM: Macdonald C CATCHWORDS: Unfair dismissal - constructive dismissal alleged - organisational restructure - new job offer - demotion - constructive dismissal found - compensation ordered LEGISLATION CITED: Industrial Relations Act 1996 Clark v Pittwater RSL Club Limited [1998] 84 IR 309 Zoological Parks Board of NSW and Australian Workers Union, New South Wales[2004] NSW IRComm 85 CASES CITED: Government Railways and Tramways (Salaried Officers) Award Case [1934] AR 5 ALHMWU, NSW Branch and City of Sydney RSL (IRC 3201 of 2001) unreported 19 March 2002 Health Administration Corporation and Others v C rocker and Others [2004] NSWIRComm 163 HEARING DATES: 06/29/2005; 06/30/2005 DATE OF JUDGMENT: 12/21/2005 APPLICANT Mr R Alkadamani, Barrister Mr L Farrand, Solicitor LEGAL REPRESENTATIVES: Harris & Company RESPONDENT Mr C Caley, Solicitor DECISION: - 38 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: MACDONALD C 21 December 2005 Matter No IRC 7345 of 2004 Timothy Kaisser and AV Jennings Homes Ltd Application by Timothy Kaisser re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 _____________________________________________________________________________ DECISION [2005] NSWIRComm 1221 1 This is an application by Timothy Kaisser ("the Applicant") for unfair dismissal against A V Jennings Holdings Limited ("the Respondent") pursuant to section 84 of the Industrial Relations Act 1996 ("the Act"). 2 The matter was set down for Conciliation and Directions on 14 January 2005. The Applicant was represented by Mr G Hansen, Solicitor. There was no appearance by the Respondent. My office contacted the Respondent's place of business and we were advised that the Respondent had no knowledge of the unfair dismissal application. My office caused a copy of the application to be facsimiled to the Respondent. 3 The matter was set down for Conciliation and Directions on 11 February. Mr Hansen, Solicitor, continued his appearance for the Applicant. The Respondent was represented by Mr C Caley, Solicitor. The Commission attempted conciliation but to no avail. The matter was set down for a Hearing. 4 The Hearing took place on 29 and 30 June 2005. The Applicant was represented by Mr R Alkadamani, Barrister, with Ms Farrand, Solicitor. Mr Alkadamani called the following witnesses: · Timothy Kaisser - the Applicant · Grant Hansen - Solicitor The Respondent was represented by Mr C Caley, Solicitor, who called the following witnesses: · Janelle Goulding - NSW General Manager; · Fiona McCaskey - Personnel Manager; · Ian McLean - Branch Manager; · Jim Thompson - Acting NSW General Manager; · Louis Milkovits - Chief Executive Officer; · Grant Hansen - Solicitor. BACKGROUND 5 The Applicant commenced his employment with the Respondent around June 1998. 6 As at 12 October 2004, the Applicant was employed as a Workflow Design and Planning Manager- Contract Housing. 7 On 12 October, the Applicant was advised of a change in his position. The Applicant entered into discussions and correspondence about his new position. He claimed that, by 15 October, he was told that if he was not happy with the new position, he should resign. 8 Further discussions and correspondence about his changed work circumstances took place but not to the satisfaction of the Applicant. As he saw it, he had been demoted. 9 By letter of 29 November, the Applicant advised the Respondent that he considered himself to have been retrenched. 10 The Applicant claims to have been constructively dismissed by the Respondent's decision to abolish his position and offer a position which represented a substantial demotion. The Applicant, therefore, ceased his employment and claims that he had no choice but to do so. 11 The Respondent claims that the Applicant was not demoted, nor was his position downgraded, and the Applicant chose voluntarily to resign his employment. Further, the Respondent claims that the Commission lacked the jurisdiction to entertain this unfair dismissal application as the Applicant had been engaged on a specific task. FINAL SUBMISSIONS For the Applicant 12 Mr Alkadamani made the following final submissions: (a) The Applicant had been constructively dismissed by the Respondent; (b) As to whether the Applicant had been constructively dismissed was a question of fact; (c) There was a substantial difference between the duties the Applicant performed and what was proposed be carried out by him by the Respondent. The proposed duties would take the Applicant back to functions he had performed years earlier; (d) Even though there was no reduction in the Applicant's salary entailed in the proposed job, there was still a constructive dismissal because of the proposed change to his duties; (e) The proposed change to his duties represented a backward step in his career; (f) The maximum compensation, with no mitigation, was sought as the Applicant's remedy. For the Respondent 13 Mr Caley, for the Respondent, made the following submissions: (a) The Applicant's job had not changed. He was a valued employee and the Respondent sought to retain his services; (b) The Respondent's letter of offer to the Applicant, dated 23 March 2004, set out that his primary duties and the title of his job position may be varied by his employer during his employment; (c) The Applicant had resigned his employment. The evidence of Ms Goulding, witness for the Respondent, was relied upon in that regard; (d) The Applicant had been looking for a career move outside of the Respondent's business and his resignation was consistent with that other career move and that may have been the motivation for the resignation; (e) The Applicant had not been constructively dismissed. The Applicant's contract of employment provided for a variation to his duties and title. This right to vary the contract distinguished the facts of this case before myself from the decision in Clark v Pittwater RSL Club Ltd (1998) 84 IR 309, which case had facts not providing for a variation to the contract of employment; (f) The Applicant had not attempted to give any changes to his duties, a trial period. Applicant in Reply 14 Mr Alkadamani, in reply, put the following submissions: (a) There was no evidence that the Applicant was engaged in a business whilst employed by the Respondent. This was in response to Mr Caley's suggestion that the Applicant had another outside career move in mind and had resigned his employment to further that outside career move; (b) There is case law that an employer can vary its policies from time to time but there are limits to such variations, otherwise a party to a contract of employment could unilaterally vary the contract in any manner. CONSIDERATION 15 The Applicant claimed that the company's restructuring of its business resulted in him being offered a position, substantially, significantly or materially different to his then position, and consequently this offered position represented a demotion. He protested about this offered position - claimed it was a demotion in his talks and correspondence with his employer - and resigned his employment. The Applicant stated that he had been constructively dismissed. 16 The Respondent had indeed restructured its business but the Respondent claimed that the position offered to the Applicant did not represent a demotion. The Applicant was said to be a valued employee. His remuneration was not reduced. The Respondent and the Applicant had entered into a written contract of employment and which provided that the Respondent could vary the Applicant's duties and title. This the Respondent had done and as such the Respondent's conduct in so varying his duties and title was a lawful conduct. In any event, the Respondent asserted that the varied duties and title did not represent a demotion. The Respondent said there had been no constructive dismissal and the Applicant had freely resigned his employment. Question of Fact 17 Whether there has been a constructive dismissal or not, is a question of fact (and not law): Clark v Pittwater RSL Club Limited (1998) 84 IR 309 of 312. The Written Contract of Employment 18 The Commission takes the view that the first point of consideration of these cases is the written contract of employment ("the contract") between the parties. The Commission takes this view because of the specific reference within that contract, to a power residing in the employer, to vary the duties of the Applicant. The purpose in considering the Respondent's legal entitlement to vary the duties, is to ascertain whether the Respondent acted within that legal entitlement, vis-a-vis the new job position put to the Applicant, or acted ultra vires. If the Respondent's new job position that was put to the Applicant was ultra vires, did that new job position represent a demotion, and hence a constructive dismissal? The Applicant's Job Positions 19 From the evidence, the Commission understands that the Applicant occupied the following job positions with the Respondent: (a) June 1998 - November 1999: CAD Operator; (b) November 1999 - September 2002: Permits Officer; (c) September 2002 - August 2003: Site Assessor - Contract Housing; (d) August 2003 - December 2003: Planning Officer; (e) December 2003 - March 2004: Workflow Design and Planning Manager; (f) March 2004 - to resignation: Workflow Design and Planning Manager - Contract Housing. The New Job Position 20 On 11 October 2004, Mr Jim Thompson, advised all staff, by memorandum, of the Respondent's new organisational restructure. It is the Commission's understanding that the Applicant was advised his new job position would be: Pre Site Workflow Executive (ex 1 - attachment D). The Applicant had discussions (oral and written) about the impact of the restructuring on his role with the Respondent. The foregoing job title was then changed to Pre Site Workflow Coordinator (ex 1 - attachment F). The Commission notes that irrespective of the job title, the position description for both is the same. 21 The Applicant in the meantime had taken legal advice and wrote to Mr Jim Thompson, Executive General Manager (AG), on 15 October and stated that his new position represents a "substantial demotion" (ex 1 - attachment G). 22 The Applicant held further discussions with the Respondent about his concerns over the new position - but to no avail. The Applicant wrote to the Respondent on 29 November 2004, advising that he would not accept the new position and that he considered himself retrenched (ex 1 - attachment N). The Commission also notes that the Applicant's remuneration was not altered by the new position description. The Respondent's Power to Vary the Contract 23 The Applicant's conditions of employment had been reduced to writing. The Commission, in that regard, refers to the contract for the position held by the Applicant up to the time of the Respondent's restructuring of its business. The position was: Workflow Design and Planning Manager - Contract Housing (ex 1 - attachment B). The Respondent's power to vary the contract, as to the relevant issue of duties, is in the following terms (under the heading of "Appointment"): " Your primary duties and the title of your position may be varied during your employment." 24 There are two features to the above quote. One goes to the Respondent's power to vary the Applicant's job title and this had happened. The second aspect is the key, relevant, issue for the Commission's consideration. That key feature is the Respondent's power to vary the Applicant's "primary duties." 25 The issue then for the Commission's consideration is whether the Respondent's proposed new position description for the Applicant - Pre Site Workflow Coordinator - represented a variation to his "primary duties", or something beyond that. The Applicant's Primary Duties 26 The Commission will now consider the evidence going to the primary duties to be held by the Applicant in the new position description and his last position held at the time of his cessation of employment. This last position was that of: Workflow Design and Planning Manager - Contract Housing. The position description for the old job is found in exhibit 1 - attachment B. The position description for the new job, Pre Site Workflow Coordinator, is found at exhibit 1 - attachment F. As part of that consideration, it will be necessary for the Commission to apply the relevant principles for interpreting industrial instruments. 27 A Full Bench of the Industrial Relations Commission of New South Wales set out the relevant principles to be applied when interpreting industrial instruments: Zoological Parks Board of New South Wales and The Australian Worker's Union, New South Wales [2004] NSW IRComm 85. Thus: "The relevant principles to be applied when interpreting industrial instruments are well settled: for example, Kingmill Australia Pty Ltd t/as Thrifty Car Rental v Federated Clerks' Union of Australia, New South Wales Branch (2001) 106 IR 217 and Construction, Forestry, Mining and Energy Union (New South Wales Branch) v Delta Electricity [2003] NSW IRComm 135 at [44] - [46]. Broadly speaking, and the primary consideration in such matters is the actual words used (and these should be given their plain, ordinary meaning) and the context in which the words are used." 28 The industrial instrument to be interpreted by the Commission are the old and new position descriptions. Section 175 Powers of Interpretation of the Act, states that the Commission may "determine any question concerning the interpretation, application or operation of any relevant law or instrument (including the industrial relations legislation or any industrial instrument)" (emphasis added) The position descriptions are an instrument. 29 In interpreting these instruments, the Commission drew upon the Oxford English Dictionary, 2nd Edition, 1989 ("The OED") 30 The comparative analysis of the primary duties between the old job and the proposed job and other evidence considered by the Commission, has led to the conclusion that the Respondent's claim that the changes to the Applicant's duties were "largely invariant", is not made out. Mr Milovits gave evidence on the meaning of this term. There would be no variations in the duties performed under the old job and the proposed new job. There might be some local management practices he was not privy to and the consequent variations arising from that, but there would be no variation in the outcomes, accountabilities and expected duties between the old and new jobs. (Tr 30/06/05 - p.36, line 53 to p.37, line 18) 31 In coming to that decision, that the Respondent's claim that the changes to the Applicant's duties were "largely invariant" has not been made out, the first line of enquiry considered by the Commission goes to an overall assessment of the Key Accountabilities of the two jobs in question. 32 An inspection of the two position descriptions records that the old job had twenty (20) "Key Accountabilities". The new job only lists six (6) "Key Accountabilities". A reduction of fourteen (14) Key Accountabilities sets up a prima facie response that such a large reduction represents a change in duties going beyond the Respondent's characterisation of "largely invariant". 33 The Respondent put on evidence to rebut the above prima facie response. This evidence came from Mr Milkovits, Chief Executive Officer, who said he had a "major authoring" role for the new job. (Tr 30/6/05 - p18). He was asked by myself, during his evidence-in-chief, the meaning of the term, "largely invariant", in the context of the old and new job position descriptions. His explanation led to him asserting that the six Key Accountabilities in the new job represented a "higher level summary" of the twenty tasks in the old job. When questioned by the Commission as to the meaning of that term, he said that although there were only six (6) Key Accountabilities in the new job, one of those Key Accountabilities subsumed a number of the twenty (20) tasks listed in the old job (Tr 30/6/05 - pp 18 - 20). So, this witness (the Chief Executive Officer) was asserting that the six Key Accountabilities in the new job subsumed a number of the twenty tasks in the old job. There are a couple of fatal problems with this explanation. 34 Firstly, there is no explanation offered by the Chief Executive Officer as to why he changed one of the terms, contained in the old job description, in order for him to make the comparison that he puts forward. Thus, both the old and new job descriptions contain the term "Key Accountabilities". Under this heading in the old job description are twenty entries, which the Commission took to be "tasks" or "duties". Similarly, the new job description has six entries, which again the Commission took to be "tasks" or "duties". But the point to be emphasised is that the term "Key Accountabilities" appears in both job descriptions. 35 However, according to the Chief Executive Officer's explanation as to why the two job descriptions are largely invariant, he, in effect, converts the expressly stated term of "Key Accountabilities" appearing in the old job description and says that it should read "Tasks". This is the effect of his evidence because his explanation given above is that the twenty Key Accountabilities listed for the old job are not Key Accountabilities but "tasks". How is it, the Commission rhetorically asks, that a company document which says "Key Accountabilities" does not mean "Key Accountabilities", but another company document which says "Key Accountabilities" does mean "Key Accountabilities"? 36 The Commission makes another observation about this claim of the Chief Executive Officer that the twenty entries in the old job description are not Key Accountabilities but tasks. The Commission compared the two job descriptions and found that two of the Key Accountabilities in both job descriptions are the same. Thus: a) Check accepted work for siting and follow drafting functions to ensure buildability, accuracy and integrity of design. b) Attend site meetings to resolve customer or company related issues. How is it, the Commission rhetorically asks, that the foregoing two descriptions are Key Accountabilities under the new job description, but the exact same description (exact same words) are listed in the old job description but are not Key Accountabilities under the old job description? 37 The Commission rejects the Chief Executives Officer's explanation as being absurd on its face. Furthermore, the Commission rejects this explanation that "Key Accountabilities" does not mean that at all for the old job description, because this explanation (crucial to the Respondent's case) was not put to the Applicant for his response. (The Applicant gave his evidence the day before that of the Chief Executive Officer). Accordingly, the Commission cannot give this explanation any weight. 38 Secondly, there is the Chief Executive Officer's explanation, as to the concept of "higher level summary" itself (see paragraph 33 above). This "higher level summary" concept (crucial to the Respondent's case) was not put to the Applicant for his response. Accordingly, the Commission cannot give this explanation any weight. Therefore, the prima facie finding of the Commission that the fourteen tasks differential between the old and new job goes against the Respondent's claim that the two jobs are " largely invariant ", still stands. 39 The Commission now turns to a deeper comparative analysis between the old job and the new job. 40 The layout of the two job descriptions is the same: Primary Purpose - Key Accountabilities - Key Criteria. 41 The Primary Purpose of the old job is: " To manage the design and permit teams across the Quotation, Contract, Council and Work Order Stages. To liaise between the Sales, Workflow and Building Teams with respect to design issues. Responsible for disciplines and outputs with consideration to quality, buildability and skill development. " (exhibit 1 - attachment B) The above quotation contains three statements which can be summarised as (a) to manage (two teams); (b) to liaise (between three teams); and (c) responsible for ... 42 The Primary Purpose of the new job is: " The Pre Site Workflow Coordinator is to coordinate, make application and achieve building permit approvals as required by Legislation whilst participating in the CAD and Site Assessment functions of the business unit. " The above quotation is one statement, having it appears three areas of work: (a) co-ordinating permit approvals; (b) participating in the CAD functions and participating in Site Assessment functions. (For the record, the term: "CAD", means Computer Aided Drafting). 43 A reading of these two Primary Purposes causes the Commission to observe that the managerial, liaison and responsibility functions of the Applicant are absent from the new job. 44 But what did the major author of the new job description, Mr Milkovits (Chief Executive Officer), say about the Primary Purposes of the old and new jobs? The Commission points out that Mr Milkovits gave evidence that he did not author the old job description but approved it. (Tr 30/06/05. p.18) 45 Mr Milkovits, under cross-examination, said that the Applicant did not manage the design and permit teams across the Quotation, Contract, Council and Work Order Stages. He denied, therefore, one of the stated Primary Purposes found in the old job. 46 Mr Milkovits said that the Applicant " had no responsibility at any stage for managing team members ." (Tr 30/06/05 - p.34, lines 25 and 26); "He managed inputs to those teams, he did not manage the teams " (p.35, lines 28 and 29) (emphasis added); ".. .he had no personnel responsibility for managing that team , he managed inputs to their work process" (p36, lines 6 to 8) (emphasis added). So, the Chief Executive Officer was saying that the Applicant did not manage workers (in either the design or permit teams) but only managed inputs (provided work) into those teams. 47 However, the day before the above quote extract was said, the Applicant was cross-examined by Mr Caley, solicitor for the Respondent. In his cross-examination, he put questions that included the premise that the Applicant did in fact manage the teams. The context for Mr Caley putting that premise to the Applicant, was in order to have the Applicant agree that he managed the teams, as opposed to he carried out design work, per se. Thus: "Caley: Q: Now, if you look at that document, annexure B, the primary purpose of your job was to manage the design and permit teams across....and skill development. Is that correct? A: Yes Q: So it was more a people management job rather that a design job, wasn't it? A: The .... Q: It didn't involve design? A: It did ....... Q: So the primary purpose was in fact managing people;.... A: In part, yes. Q: Yes, well, that was the primary purpose. It wasn't just in part, was it? It was the primary purpose of your job? A: Well, to manage the design and permit teams. Q: Yes, manage the teams? A: Yes (Tr. 29/06/05 - p.22) _______________________________________________________________ Q: And that job, as I've indicated earlier, was principally people management, wasn't it? A: People and design management. Q: Yes, but managing a design team is not doing design yourself? A: What I had done..... (Tr. p.28) 48 The questioning of the Applicant above is premised on the basis that the Applicant managed teams, and pointedly "people management." Elsewhere, under cross-examination, the Applicant described his design role as having "input of design matters" (Tr 29/06/05-p.23). Thus, the Applicant and the Chief Executive Officer were in agreement that the former had an input role for the design and permit teams. But the cross-examination by Mr Caley had the Applicant doing not only input work but also "people management". The cross-examination of the Applicant did not elicit evidence that "input" work was one and the same as "people management". Mr McLean was cross-examined on this issue of "people management". Initially he said that the Applicant had no such function. But he conceded that the Applicant had a close working relationship with those people to whom he provided work input. These people were CAD Operators and Permit workers. Mr McLean then agreed that a person responsible for assigning work to CAD Operators and following through with that assignment would have some element of managing as a function. (Tr 29/06/05 - p.84, lines 3 to 35) In respect of that evidence, the Commission notes that one of the old job Key Accountabilities was: " Assign and manage work to CAD Operators ". 49 The foregoing evidence of Mr McLean and the foregoing extract of evidence from Mr Caley's cross-examination of the Applicant elicited evidence that contradicts the Chief Executive Officer's testimony of the following day that the Applicant did not manage the teams. Given the contradiction between the Respondent's instructing solicitor on the one hand and the Respondent's Chief Executive Officer on the other, the Commission prefers the evidence of the Applicant where he agrees with Mr Caley that he managed the design and permit teams, and specifically, "people management." A reading of the Primary Purpose for the new job shows that no managing responsibility is stated. 50 The second issue that arises for consideration under Primary Purpose, for the old job, is that it states that the Applicant was "To liaise between the Sales, Workflow and Building Teams with respect to design issues." Shortly put, the Applicant was to liaise between three teams. Mr Milovits said of this liaison work: " The fact is he liaised extensively with permit staff, he liaised extensively with estimators, he liaised extensively particularly with CAD operators because of the nature of the input to his work on a house by house, will it fit, is there an overlook, does it approve council requirements for that street et cetera. So there is an extensive liaison role there where he provided job specific input to an outcome and he certainly did not manage that outcome. " (Tr. 30/06/05 - p.32) A reading of the Primary Purpose for the new job shows that no liaison responsibility is stated. 51 The third issue that arises for consideration under Primary Purpose for the old job, is that it states that the Applicant was: "Responsible for disciplines and outputs with consideration to quality, buildability and skill development". This express function of having "Responsibility" is not cited as a requirement for the new job. Even though it is not cited, arguably it is inherently present because all workers have responsibility in carrying out their work. So it might be said that "responsibility" is not absent from the new job. But it seems to the Commission that the expressly stated function of "Responsibility" in the old job is separate to and goes beyond the type of inherent responsibility referred to above. 52 There was evidence given about one of the Primary Purposes stated for the new job. This was: "...co-ordinate, make application and achieve building permit approvals as required by Legislation..." The Applicant said in re-examination that the above role was purely administrative; one that was performed by a young girl, Danielle Hickey; and one that he did many years ago. (Tr 29/06/05 - p.50, line 40 to 52) Ms Goulding, under cross-examination disagreed largely with the foregoing. She said the Applicant was still involved in the above role but the lodging of applications to councils for approval was probably done by Danielle Hickey. (Tr 29/06/05 - p.61, line 24 to 46) 53 The Commission will now consider the evidence of the witnesses pertaining to the Key Accountabilities listed for the old and new job - and evidence about the list of responsibilities contained in the Applicant's Right of Reply Statement (ex.3). This list of responsibilities is in the form of a spreadsheet which cites the responsibility and commentary by the Applicant as to what the responsibility entailed in the old job and whether he still performed that responsibility in the new job. (ex 3 - annexure A) Where the Commission lists below a responsibility that is found in either the old or new job, it is identified by the terminology "New Job KA" or "Old Job KA". The abbreviation "KA" stands for "Key Accountability". Where the Commission lists a responsibility that is found in exhibit 3 - annexure A, then it is designated as "ex 3 - annex A". It is to be noted that not all responsibilities are listed. For example some responsibilities were raised during proceedings but not taken to the next stage and put in issue. And the Commission has not listed the responsibilities, contained in ex 3 - annex A, that were only raised with Mr Milovits, the Chief Executive Officer. Suffice to say in that regard, that Mr Milovits disagreed that those responsibilities only raised with him, would no longer be performed by the Applicant in the new job. Thus, Mr Milovits' evidence supported his claim that the change in duties between the old and new job was largely invariant and hence there had been no demotion of the Applicant. Where Mr Milovits is questioned about a responsibility, which was also raised with other witnesses called by the Respondents, then his evidence is recorded for purposes of comparison with the other Respondent witnesses and that of the Applicant. Each responsibility listed below is identified by underlining. 54 Pre-sales - The Applicant deposed he would no longer have this responsibility (ex 3 - annex A). Ms Goulding concurred with the Applicant's contention. (Tr 29/06/05 - lines 30 - 37) Mr McLean disagreed with the Applicant's contention. He justified his response on the ground that the Applicant would be required to visit work sites. It was put to Mr McLean that in the last twelve months, the Applicant had only attended one site. He did not comment on that but responded that the Applicant would have made hundreds of visits prior to the last twelve months. (Tr 29/06/05 - p.89, line 32 to p.90, line 2) Mr Thompson disagreed with the Applicant's contention. He said that the Pre-Sales responsibility was listed in the new job as: Check accepted work for siting and follow drafting functions to ensure buildability, accuracy and integrity of design. (New Job KA) (Tr 29/06/05 - p.119, line 2 to p.120, line 4) Mr Milkovits said the Applicant would continue to provide Pre Sales support which he described as the process whereby the company has to examine whether or not the customer's housing request is buildable and convey that back through the sales consultant to the customer. (Tr 0/06/05 - p.52, line 44 to p.53, line 25) 55 Responsibility for assessing each new job to determine whether it complied with the company's design policy. (ex 3 - annex A) Mr Milkovits corrected the above responsibility to read "variation" (not design) policy. He said this responsibility would continue in the new job and this would be carried out by site visits and that was why the Applicant was provided with a company car. (Tr 0/06/05 - p53, lines 27 to 44) 56 Performance Reviews (ex 3 - annex A) - The Applicant had carried out a staff performance review but would no longer have this responsibility. Ms Goulding was not aware the Applicant had carried out a performance review but said she had left the company in March 2004 and reviews are carried out in June. She said the Applicant's job description would not list performance reviews as part of his responsibilities. (Tr 29/06/05, lines 39 to 58) Ms McCaskey was not aware that the Applicant had conducted a performance review. She agreed that this responsibility was not listed as a New Job KA. (Tr 29/06/05 - p.70, lines 7 to 22) Mr McLean concurred that the Applicant did conduct one set of staff appraisals because of workload pressure one year and was asked to do so by both the Work Flow Manager and the Operations Manager. This was, he said, a one off thing. (TR 29/06/05 - p.79, lines 48 to 53) He agreed under cross-examination, that the performance appraisals was only carried out once because it occurred in 2004 and the Applicant was not employed in 2005, when the appraisals would be done again. (Tr 29/06/05 - p.84, lines 37 to 46) Mr Milkovits was not aware that the Applicant carried out performance appraisals. (Tr 30/06/05 - p.51,lines 4 to 11) 57 Assist with training sales and workflow teams (Old Job KA) The Applicant's representative put to Mr Thompson that the Applicant would not be carrying out the above responsibility in the new job. Mr Thompson disagreed and said that the above responsibility was listed in the new job as: Check accepted work for siting and follow drafting functions to ensure buildability, accuracy and integrity of design. (New Job KA). This response was challenged by the Applicant's representative (Mr Alkadamani) with a tone of disbelief - so it seemed to the Commission. Mr Alkadamani said his question went to sales and workflow teams and that CAD Operators were not sales operators. Mr Thompson agreed but still insisted on his response that training sales and workflow teams were covered by that particular New Job KA cited above. (Tr 29/06/05 -p.120, line 45 to p.121, line 38). The Commission notes that Mr Thompson also said that the above cited New Job KA ( Check accepted work... ) covered the following Old Job responsibilities: Pre Sales (Tr 29/06/05 - p.119, line 32 to p.120, line 4); Responsibility for assessing each new job and determining whether it complied with council requirements (p.120, lines 6 to 9) ; Responsibility for accepting or rejecting or refusing changes that might be required for council approval . (p.120, lines 11 to 6) 58 Optimise design solutions (Old Job KA) Mr Thompson agreed that this responsibility was not listed as a New Job KA (Tr 29/06/05 - p.122, lines 19 to 22) 59 Prepare pre commencement forms and applications to associated utilities and ensure approval within agreed timeframes. (New Job KA) The Applicant said he did not carry out this role in his old job. Ms Goulding said that the Applicant did carry out this responsibility and that it was part of the CAD and design functions (Tr 29/06/05 - lines 16 to 31) 60 Site assessments when required (Old Job KA) The Applicant deposed that he only carried out this responsibility on one occasion. His evidence was that he had had a previous role of Site Assessor (September 2002 - August 2003) and the new job had Site Assessment as a Primary Purpose, and hence his claim that his career was going backwards. Ms Goulding had no knowledge as to how many visits the Applicant made to sites. Her evidence was that the Applicant was required to do council lodgement work and this, she said, involved visiting a site for a site assessment. (Tr 29/06/05 - lines 1 to 57) Mr Thompson said that the Applicant would be required to regularly attend site meetings in the new job - just as he had done in his old job. He conceded he did not know how many times the Applicant attended sites in his old job between March 2004 and the cessation of his employment. (Tr 29/06/05 - (p.122, line 5 to p.123, line 34) Mr Milovits confirmed that the new job entailed numerous and regular site visits by the Applicant. Site visits meant visiting a proposed location where a customer intended a house to be built. (Tr 0/06/05 - p.52, lines 1 to 42) 61 Responsible for the timelines and accuracy for drafting of quotes, contracts and work orders by managing the efficiencies of CAD operators. (Old Job KA) and Assign and manage work to CAD operators. (Old Job KA) The Applicant said he would no longer have these responsibilities. The Applicant's representative put to Ms Goulding that these two KAs were different in responsibility to: Assist work to CAD Operators and monitor events data input relating to the CAD functions . (New Job KA) Ms Goulding agreed that the latter responsibility was different to assigning work to CAD Operators and managing it. (Tr 29/06/05 - p.69, line 44 to p.70, line 5) Mr Thompson agreed that the latter responsibility ( Assist work to CAD Operators. ..) was different to assigning work to CAD Operators and managing that work. (Tr 29/06/05 - p.119, lines 23 to 30) Change in Duties - Summary of Evidence 62 The Commission had already stated that it did not accept the Respondent's claim that the change in duties was "largely invariant". The meaning of that term (as used by Mr Milovits, the Chief Executive Officer), is found in paragraph 30 of this Decision. The Commission will now summarise the evidence that has led the Commission to conclude that there were changes in the duties and Primary Purposes of the Applicant and these changes went beyond " largely invariant". The Commission will then consider whether the changes proposed by the Respondent went beyond the Respondent's legal entitlement, contained in the contract of employment, to vary the Applicant's primary duties. 63 In considering whether the new job would result in changes to the Applicant's old job, the Commission, first of all, considered this question from an overall assessment perspective. The old job listed twenty (20) Key Accountabilities. The new job listed six (6) Key Accountabilities. The difference, that is the reduction in the number of duties to be performed is fourteen (14). This is well and truly beyond " largely invariant". The Respondent, it is fair to say, was aware of this stark mathematical difference. 64 Mr Milovits, the Chief Executive Officer asserted, in effect, that there was no mathematical difference, because the six (6) KAs in the new job position description was equal to the twenty (20) KAs in the old job position description. Mr Milovits asserted that the 20 KAs in the old job were not KAs but tasks. Further, these 20 tasks were subsumed by the 6 KAs in the new job. 65 The Commission rejects this assertion. Firstly, there was no evidence provided that the 20 KAs listed in the old job were not KAs but tasks - apart from the assertion. The old job description is headed "Key Accountabilities", as is the new job description. Why is it that a company document (the old job) which say Key Accountabilities does not mean Key Accountabilities? Why is it that a company document (the new job) which says Key Accountabilities, does in fact mean Key Accountabilities (and not tasks)? The Commission rejects this assertion of Mr Milovits. 66 But further, the Commission rejects this assertion that the new job KAs subsume the old job tasks, because this assertion was not put to the Applicant for his response. 67 Accordingly, the Commission gives no weight to this assertion of Mr Milovits. The consequence of this finding by the Commission is that there is a difference, and hence a reduction of fourteen primary duties, in respect of the new job offer. Such a reduction goes beyond " largely invariant " changes. 68 The Commission also rejects the Respondent's claim that the changes in the two jobs were "largely invariant", on the basis of comparing the Key Accountabilities. As reported at paragraph 36 of this Decision, the Commission compared the two job descriptions and found that two of the KAs in both job descriptions are the same. One of these two KAs had a "design" component to it: "Check accepted work for siting and follow drafting functions to ensure buildability, accuracy and integrity of design" Thus there was only one KA in the new job that had a design component. However, there are four other KAs in the old job description, having a design component. It is impossible for the one only KA in the new job, having a design component, to subsume all five KAs having a design component in the old job. This is so because that one KA having a design component in the new job, is cited, word perfect, as a KA in the old job description. This means that there are four duties, at least, that would no longer be performed by the Applicant in the new job. 69 Mr Thompson, Acting NSW General Manager, also gave evidence about the one off design component KA cited above. (See paragraph 57 above). He said that this one off duty covered the work of (akin to Mr Milovits' "subsume" process) four KAs listed under the old job description. The Commission rejects this claim of Mr Thompson. Firstly, this "subsume" concept of Mr Thompson was not put to the Applicant for his response and so the Commission can give no weight to this claim of Mr Thompson's. Secondly, and separate to that, it was not just believable that the above cited KA (which went to the buildability, accuracy and integrity of design of a house), subsumed the subject matter of training the sales and workflow teams. Mr Alkadamani was incredulous at this explanation and challenged Mr Thompson's evidence on this point. The Commission also found this explanation incredulous and accordingly the Commission prefers the evidence of the Applicant where there is a conflict in the evidence between the Applicant and Mr Thompson. 70 The Commission has already rejected the claim that the one KA, having a design component, subsumed four KAs listed in the old job description. The rejecion of Mr Thompson's claim that this same one KA in the new job description covered the training of sales and workflow teams KA listed in the old job description, makes for a total, so far, of five KAs not listed as duties to be performed in the new job description. Given the incredulous claim of Mr Thompson, referred to above, the Commission does not accept that this one KA cited in the new job description, covers the three other KAs in the old job description, as cited by him in his evidence. (See paragraph 57 of this Decision). These three KAs, coupled with the five other KAs, found in the old job description, are not accounted for in the new job description. That means that the Commission has eight KAs,, out of twenty KAs, listed in the old job description, not accounted for and this number of KAs is well in excess of "largely invariant". 71 The Commission will now consider the Primary Purposes of the two job descriptions. The Commission has already observed that the three primary purposes stated in the old job description were absent from the new job description: a) To manage...; b) To liaise and c) Responsible for... Similarly, it might be said that the co-ordination and participation primary purposes contained in the new job description are absent from the old job description - and so what of the three primary purposes being absent from the new job description? 72 But the Commission takes the view that the primary purposes set out for the old job description reflect a greater level of responsibility than that required for the new job. The Commission relies upon the following consideration in support of that view. 73 Firstly, the first stated primary purpose is: "To manage". The OED defines "manage" as inter alia: "To take charge of, control, or direct (a household, institution, business, state etc) (emphasis added) The Commission canvassed at length the evidence going to the management role of the Applicant. (See paragraphs 43 to 49 inclusive) This evaluation was required because Mr Milovits put a certain view about the Applicant's managing role - but this was rejected by the Commission which found that the Applicant was engaged in a managing role, including people management. The Commission records that this managing role was directed at two business teams - design and permits. The Commission's finding is that the managing role of the Applicant went beyond the claim of Mr Milovits that the Applicant merely provided work to the teams. The Applicant also had a close working relationship with these teams and was involved in people management. The Commission further notes that one of the KAs for the old job cited a managerial role: "Assign and mange work to CAD operators". It was this particular KA that caused Mr McLean to concede that there was some element of managing by the Applicant in order to see that the job got done. And so, this type of evidence assisted the Commission in finding that the Applicant had more that just an input role as put by Mr Milovits. 74 One of the teams managed by the Applicant was the design team. Mr Milovits gave evidence several times that the Applicant was not engaged in design work, per se. The impression left in the mind of the Commission was that Mr Milovits went to lengths to rule out that the Applicant was involved in design work, per se. For example, he corrected Mr Alkadamani's question which had a reference to "design" in it and said in his response to the question that the correct term was "variation" policy and not "design" policy. (See paragraph 55 of this Decision) 75 The Applicant's evidence as to "design" was that he did not do the physical drawing part of the design work. (Tr 29/06/05 - p.23). But he said his design role was one of having "input of design matters" in respect of house design variations. (Tr p.23). He further said that his role required a "knowledge of design otherwise it (the role) will be purely an administrative role that anyone could take on" (Tr p.29) Again, he explained the design role as: " I mean it's common knowledge that when you get an approval out of council a lot of times they will put in conditions of consent relating to specific design items, changes that they request. Anyone that's built a house will understand that and all that has received an approval that would involve my input as to what we needed to do; what design changes needed to be made; alterations that had to be made to satisfy that condition of consent and then the work order could be complete....there are a lot of issues that involved design things: What do we do? You know questions: "What do you do? Do we raise the house? Do we provide this beam? Do we have to, you know, make rooms smaller? Do we need to adjust the set backs?" All these little design things I was responsible for." (Tr p.35) All of the foregoing extract of evidence was given under cross-examination. Mr McLean was cross-examined on an aspect of the Applicant's design role, being the Applicant's requirement to attend council meetings to resolve customer or company related issues. It was put to him, by Mr Alkadamani, that that duty (role) required being able to suggest changes to a building application that had been rejected by the council. The changes that the Applicant could suggest were variations or solutions to the rejected building application. Mr McLean concurred with the above provided that such changes were within the company's policy, which he described as a "variation policy" - just the same as Mr Milovits. Further these changes that could be made by the Applicant would have to be "minor" changes. (Tr 29/06/05-p.84, line 53 to p.85, line 18) Although Mr McLean used the term "variation policy" he was able to confirm that the Applicant did engage in some variation role, which for a reason, the Commission will call a design role - because it required the Applicant to have design knowledge and to utilise that knowledge. Mr Milovits on the other hand, called it a "variation policy" but in the Commission's view did so in order to down play the design role of the Applicant under his old job designation. This down playing of the Applicant's design role by Mr Milovits was consistent with his down playing of the Applicant's managing role and consistent with Mr Milovits explanation that the six (6) KAs in the new job description subsumed the twenty (20) KAs in the old job description. 76 Secondly, another primary purpose role of the Applicant was that of liaison. He was to liaise with three business teams. This expressed primary purpose was absent from the new job description. But one of the six KAs involved liaison work but specifically directed at the local council level. The old job description on the other hand required liaison with three business teams with respect to design issues. He was also required, per the listed KAs to liaise with the Workflow Estimating Manager and liaise with Engineers, Surveyors and Certifiers. Mr Milovits said that the Applicant had an extensive liaison role. (See paragraph 50 of this Decision). The Commission finds that the Applicant's extensive liaison role under the old job is diminished significantly under the new job to only one liaison role. Absent, as well, is the liaison with senior personnel. 77 Thirdly, The expressed Primary Purpose of Responsibility is absent from the new job description. The Commission has already expressed its view that this stated expression goes beyond the inherent responsibility found in any job. The Responsibility function is expressed in terms of responsibility for disciplines and outcomes and the latter requirement is consistent with managerial responsibility which the Commission has held that the Applicant carried. 78 Fourthly, the Primary Purposes of the new job are co-ordinating and participating. The co-ordination role goes to permit approvals. He is to co-ordinate, make application and achieve building permit approvals. The Applicant described this as an administrative role but the Commission does not agree entirely. This primary purpose, read in conjunction with the KAs listed for the new job, show that although there may be an administrative role involved in this primary purpose, the Applicant is still required to "achieve" building permit approvals. The "achieve" role would require the exercise of the Applicant's skills. However, the co-ordination role is considerably below the responsibility level required of the Applicant in the old job where he is "To Manage", "To Liaise" and "Responsible for..." 79 Fifthly. The participating role is considerably below the "To Manage", "To Liaise" and "Responsible for..." responsibility level required of the Applicant in the old job because the Applicant is only involved in a participating process rather than managing the process. . Demotion and Case Law 80 The Commission has found above that the Respondents action in this case constituted a demotion. It has been established by case-law that the Commission's jurisdiction in unfair dismissal cases extends to awarding remedies for demotion - Government Railways and Tramways (Salaried Officers) Award case (1934) AR 5 at page 7 as follows: "...We see no reason why these words should limit the jurisdiction of the Commission to award re-instatement to cases where the employee for whom the award is sought had been dismissed. We think the jurisdiction extends equally to the case of an employee who has been reduced (in rank, position or grade)..." The above case was cited favourably by Commissioner Connor in the matter of Australian Liquor, Hospitality and Miscellaneous Workers Union, New South Wales Branch and City of Sydney RSL (IRC 3201 of 2001) unreported 19 March 2002. Further, in that decision, the Commissioner found that "If there is an unfair demotion, the Commission is entitled to intervene in support of the demoted employee" (page 9). On balance, the Commission finds that there was a demotion and that it was an unfair demotion. The contract of employment did allow for the duties of the employee to be varied but that does not grant to an employer a 'blank cheque' as it were, to vary at will. The variation still must be fair. This is derived from the implied terms of a contract of employment that requires the parties to act fairly in their dealing with each other and more specifically the duty on the employer to act reasonably when exercising the discretions available to them under a contract of employment with an employee. In this way, while the contract may be varied by the employer, it cannot be varied to the extent that there is a wholesale revision of the contract. This approach is in line with the Full Bench decision in Health Administration Corporation and Others v Crocker and others [2004] NSWIRComm 163 specifically at paragraph 34 as follows. "the discretion to alter...would nevertheless be constrained by an implied term that the appellant would act with due regard for the purposes of the contract of employment ( Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 at 63,137-138; so it could not act capriciously, and arguably could not act unfairly towards the respondent; cp. Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 at 61. It might also be a power which by implication, must be exercised reasonably having regard to the nature of the contract and the entitlements which exist under it (Renaud Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234 at 279-280 per Handley JA" Accordingly, the Commission finds that the Respondents conduct in varying the terms of the Applicant's contract went too far to be within the ambit allowed under the variation of duties clause in the employment contract. To compensate the Applicant the Commission makes the Orders set out at the end of this Decision. OTHER ISSUES Job Title 81 An issue pursued during the proceedings by the Respondent, was that the Applicant was only concerned about the title of his new job and not with the substance of the new job. The Chief Executive Officer was cross-examined on this issue and initially his evidence was that the Applicant was only concerned with the new job title. He agreed he only had one conversation with the Applicant. His attention was drawn to the witness statement of Ms McCaskey, Personnel Manager, which contained an annexure being an email from the Chief Executive Officer to her. This email said "...Tim (the Applicant) is more concerned about his perceived reduced work value of his position, rather than anything else. He said he was not concerned about issues such as the title of his position (as I had been previously led to believe) but he was concerned about the nature of his duties having fundamentally changed." (ex.8 - annexure C7) (Tr 30/06/05-p.46, line 24 to p.51, line 2) Accordingly, the Commission concludes that the Applicant was concerned about the substance of the new job being offered to him. Specified Task 82 The Respondent put on an Employers Reply to the unfair dismissal application and in that, raised a jurisdictional bar that the Applicant had been engaged for a specific task and was not therefore entitled to bring his claim. This jurisdictional argument was not pursued in final submissions - and nor did it appear to have been pursued during the evidentiary proceedings. Accordingly, this issue is not a matter for the Commission's consideration. Applicant's Registered Business Name 83 One of the Respondent's witnesses, Janelle Goulding, NSW General Manger - Homes, deposed of a conversation she had with the Applicant on 24 November 2004 (ex 7 - annexure A). She deposed that the Applicant referred to the emails to-ing and fro-ing about the new job offer. She asked him to think about his action and he allegedly responded: "It's all right, I have been wanting to go back to my own business for a long time." 84 In final submissions, Mr Caley for the Respondent, put that the Applicant had registered a business name well prior to the events of 2004 and the Applicant had resigned his employment because he was looking for some career move outside of the Respondent's business. He relied upon the deposition of Ms Goulding (referred to above) and other evidence to support the above submission. 85 The Applicant deposed he had not said the words attributed to him by Ms Goulding. He deposed he said: "I will be okay. There's a few possibilities out there.". (ex 3 - paragraph 11) 86 The Applicant confirmed under cross-examination that he had registered a business name earlier in 2004 (24 March). Subsequent to his alleged constructive dismissal of 29 November 2004, he took out an Australian Business Number ("ABN") and set up a design and drafting business that operates by word of mouth. (Tr 29/06/05 - p.9 to 12) 87 Having considered the above evidence, the Commission rejects Mr Caley's submission that the Applicant resigned his employment in order to pursue his own business venture. 88 It was not necessary for the Commission to decide on the disputed conversation between Ms Goulding and the Applicant in coming to that conclusion. Even if the Commission accepts the contents of the conversation deposed by Ms Goulding, it does not prove that he resigned his employment in order to pursue his business interest. At the point of his cessation of employment, all he had was a registered business name. He had no ABN and no business. More importantly, this conversation took place five days before the cessation of his employment and long after the Applicant had already rejected the new job and advised by conversation and correspondence, that he saw the new job as a demotion. The Applicant's expressed adverse views on the new job did not come after the disputed conversation. If that had been the case, then the Commission may have come to a different conclusion. Accordingly, the Commission rejects Mr Caley's submission on this issue. Signatures of Approval 89 Mr Alkadamani submitted that there was other evidence (being a document) that goes against the Respondent's claim that the difference between the two jobs is "largely invariant". This document is the position description itself for the new job - but in particular the "Signatures of Approval" that appears at the bottom of that position description. The following relevant notation appears: " The Chief Executive Officer's signature is required where a position is created or accountabilities are varied by more than 20%." Underneath the above quote is the following: Chief Executive Officer: Louis Milkovits Date: Wednesday 13 October 2004 The foregoing relevant notation goes against the Respondent's claim that the changes in the Applicant's duties, from the old to the new job, were " largely invariant ". This was the point made by Mr Alkadmani, Barrister, on behalf of the Applicant, in final submissions. 90 But the Commission has difficulty in giving weight to this submission. Firstly, and technically speaking, there is no "signature" by the Chief Executive Officer. Secondly, and more importantly, this point by Mr Alkadamani, was not put to Mr Milkovits during cross-examination. It was important to put this issue because it prima facie contradicted Mr Milkovits' claim that the change in duties was "largely invariant". Accordingly, the Commission is unable to place any weight on this submission as to "signatures of approval", by Mr Alkadamani. CONCLUSION 91 Having considered all of the evidence, the Commission concludes that the demotion of the Applicant was harsh and unjust: Outboard World Pty Ltd (t/as Budget Waste Control Sydney) v Muir (1993) 51 IR 167. The Applicant has sought compensation as his remedy. In assessing a claim for monetary compensation, the Commission must consider the provisions of s 89(6) - that is, whether an Applicant made a reasonable attempt to find alternative employment and the remuneration gained by an Applicant who succeeded in obtaining alternative employment. However, s 89(6) is not to be taken as a simple, mathematical formula in the assessment of compensation and the Commission retains its discretion to order the appropriate quantum of compensation, as the Commission deems appropriate for the circumstances under consideration: D and R Commercial Pty Limited v Flood (2002) 113 IR 344. The Commission also notes the reinstatement was not sought and the Commission has formed the view that reinstatement is impracticable. O R D E R S In this matter, for reasons outlined herein, I have determined that the dismissal was harsh and unjust and I hereby make the following orders: (a) The Commission orders that the Respondent pay to the Applicant an amount of compensation of $20,000.00 gross. (b) The amount of compensation specified above has been determined, having regard to section 89(5) and 89(6) of the Act. (c) The amount of compensation specified above is to be paid by the Respondent to the Applicant within twenty-one days from the date of this Decision. A Macdonald Commissioner DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.