Industrial Relations Commission of New South Wales CITATION: Buttigieg v. Shoalhaven City Council [2009] NSWIRComm 1080 APPLICANT Norman Joseph Buttigieg PARTIES: RESPONDENT Shoalhaven City Council FILE NUMBER(S): IRC 1134 of 2009 CORAM: Connor C CATCHWORDS: demotion - local government employment - allegation that claim out-of-time - challenge that the demotion was not a dismissal and beyond the scope of the unfair dismissal jurisdiction - application dismissed as falling outside jurisdiction LEGISLATION CITED: Industrial Arbitration Act 1940 Industrial Relations Act 1996 Brady v. Kennedy, trading as 'Sardines' (1999) 91 IR 258 Federated Municipal and Shire Council Employees' Union of Australia v. Young Shire Council - unreported Griffith Ex-Services Club Limited v. Federated Liquor and Allied Industries Employees' Union of Australia (1993) 51 IR 186 Mann v. Side Cafes Pty Limited - unreported CASES CITED: Parker v. Capitol Painters Pty Limited (196) 68 IR 100 Roberts v. Mona Vale District Hospital (1975) 2 NSWLR 132 Russian v. Woolworths (South Australia) Pty Limited (1995) 64 IR 169 Schuck v. Ipec Transport Group (1994) 36 AILR Rep.41 Skelly v. Prouds Jewellers Pty Limited (1994) 53 IR 3 Ex Parte Wurth: Re Tully (1954) 55 SR(NSW) 47 HEARING DATES: 06/10/2009 DATE OF JUDGMENT: 9 October 2009 APPLICANT David Button Kelly Mullard White Solicitors LEGAL REPRESENTATIVES: RESPONDENT Aaron Allegretto Local Government Association of New South Wales DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Friday, 9 October, 2009 Matter No IRC 1134 of 2009 Norman Joseph Buttigieg and Shoalhaven City Council Application under S.84 of the Industrial Relations Act, 1996 DECISION [2009] NSWIRComm 1080 Introduction 1 Mr Norman Buttigieg has on Tuesday, 4 August, 2009 lodged an application under Part 6, Unfair Dismissals, of Chapter 2, Employment [Ss.83 to 90] of the 1996 Industrial Relations Act, claiming he was dismissed on Monday, 7 July, 2009 after twelve months of employment as a supply team leader with Shoalhaven City Council following allegations that he negligently authorised fraudulent invoices. Police action is pending concerning the fraudulent invoices (but that action does not apparently involve Mr Buttigieg). Nevertheless, the council has claimed that Mr Buttigieg was negligent in the performance of his work. 2 There are, in fact, two issues which may affect Mr Buttigieg's Part 6 application, viz: (i) the Part 6 application was purportedly lodged outside the 21 day time limit prescribed by S.85(1); and (ii) Mr Buttigieg has not been dismissed but demoted in employment to a position of storekeeper at the council's Ulladulla store. The council has challenged Mr Buttigieg's Part 6 application on those two jurisdictional grounds. 3 Mr Buttigieg applied for the advertised position of supply team leader with the council in the middle of 2007 and on Wednesday, 25 July, 2007 the council wrote to him offering that position, viz: "....Following your recent interview, I would like to offer you the permanent full time position of supply team leader. This position is located in the Finance and Business Section of the Finance and Corporate Services Group... Your duties will be those set out in the original advertisement for the position and the job description... including...to ensure the Supply Unit provides a high level of customer service and that council's procurement is undertaken in accordance with policy and procedure. Your appointment to this position with council is made in accordance with the Local Government Act, 1993 and is subject to: (a) the applicable conditions of that Act; (b) ....the Local Government (State) Award 2004...; (c) compliance with all of council's workplace policies, codes and procedures, as amended from time to time, including those specifically referred to in this offer of employment; (d) any local agreements made between council and employees; (e) obtaining the general manager's approval if you wish to engage in any outside employment that may conflict with your duties at council..." For reasons I will outline later in this decision, it is the Local Government Award which, in my opinion, has particular relevance in this hearing. 4 Mr Buttigieg's Part 6 application has been allocated to me and I set it down for a preliminary hearing for conciliation on Tuesday, 25 August, 2009. Conciliation failed to settle the matter. I programmed it for arbitration on Tuesday, 6 October, 2009 to consider the council's objections on jurisdictional grounds as threshold issues. The proceedings with respect to this matter were convened in the Commission's premises at 90 Crown Street, Wollongong. Mr Button represented Mr Buttigieg and Mr Allegretto represented the council and the Local Government Association of New South Wales. The Alleged Delay 5 A time limit is imposed on the lodging of applications over unfair dismissals. S.85(1) provides as follows: "Any application under this Part must be made not later than 21 days after the dismissal." Under S.85(3) members of the Commission hold a discretion to accept an out-of-time Part 6 application if they consider that there is sufficient reasons for doing so. In determining whether there is sufficient reason to hear an out-of-time Part 6 application, S.85(3) directs them to have regard to a number of specific matters: (i) the reason for, and the length of, the delay, (ii) any hardship that may be caused to the applicant if the claim is denied or the employer if it progressed and (iii) the conduct of the employer. All relevant considerations should be taken into account in determining whether to grant an application out of time to proceed [ Brady v. Kennedy, trading as 'Sardines' (1999) 91 IR 258]. 6 But, primarily, it is a question of determining where the balance of convenience actually lays: whether a late applicant employee should be denied a remedy or the respondent employer be put to the considerable inconvenience which may arise for him from a late application [Griffith Ex-Services Club Limited v. Federated Liquor and Allied Industries Employees' Union of Australia (1993) 51 IR 186 at p.191 and Parker v. Capitol Painters Pty Limited (1996) 68 IR 100 at p.101]. 7 Nevertheless, the prima facie position is that the 21 day time limit should be followed: it is a clear instruction of the legislature that the time limit should be imposed and to depart from it there must be some material upon which to exercise the discretion in favour of an out-of-time Part 6 applicant [Skelly v. Prouds Jewellers Pty Limited (1994) 53 IR 3 at p.5]. Otherwise the time limit in S.85(1) would be meaningless. Mr Buttigieg has not recorded in his Part 6 application any reason for his ostensible delay. The reason for that is that he, in fact, claims that there was no actual delay on his part - but the council disputes that. 8 In the Part 6 application, Mr Buttigieg recorded that the date of his "dismissal" (ie his demotion) was Tuesday, 7 July, 2009 (which would mean that his Part 6 application was lodged 27 days later and therefore outside the 21 day time limit). The council informs me that actually his demotion took effect on Thursday, 9 July, 2009 (which would still mean that he lodged his Part 6 application 25 days later - still outside the 21 day time limit). But, in any event, Mr Button asserts that the demotion only came into effect on Friday, 31 July, 2009 since Mr Buttigieg was absent on annual leave until that date. If that was the effective date for the demotion, then his demotion was not out-of-time at all. I believe that Mr Button is entitled to rely on that later date for Mr Buttigieg's Part 6 application. Demotion 9 But the question remains whether Mr Buttigieg has been dismissed at all. It is trite to say that no remedy would be available to an employee under Part 6 unless he was "dismissed" in the first place. S.84(1), a pivotal provision in Part 6, makes that clear, viz: "If an employer dismisses an employee and the employee claims that the dismissal is harsh, unreasonable or unjust, the employee may apply to the Commission for the claim to be dealt with under this Part." The word "dismissal" ordinarily denotes a discharge from employment - a severance of the contract of employment in its entirety. As Brereton J of the State Supreme Court commented in his separate judgement in Ex Parte Wurth; Re Tully (1954) 55 SR(NSW) 47 at p.59, the word "dismissal" must be given its ordinary and natural meaning in the context in which it lies in particular legislation and: "…both by use and by derivation its basic meaning is '...to send away...'…" 10 There is nevertheless a considerable body of authority to support the contention that a demotion may, in certain circumstances, still constitute a dismissal for the purposes of Part 6 [Schuck v. Ipec Transport Group (1994) 36 AILR Rep. 41 and Russian v. Woolworths (South Australia) Pty Limited (1995) 64 IR 169]. For instance, in my unreported decision of Tuesday, 7 May, 1996 in Mann v. Side Cafes Pty Limited [Matter No.IRC 413 of 1996] I commented (at pp.3 and 4) as follows: "…(the respondent employer) asserted in the hearing that, since (the applicant employee) had been offered alternative work and had declined that work, the termination of his services was not a dismissal for the purposes of (the equivalent to Part 6 in the 1991 Industrial Relations Act). The fact is that the transfer of (the applicant) to the work at the Narrabeen cafe involved a substantial reduction in salary for him, ie it was, in effect, a demotion. Is such a demotion categorised as a dismissal…? I believe that it was… Much now depends upon whether a demotion constitutes such a break in the contract of employment, and its replacement with another contract of employment, so as to constitute a dismissal… That will depend upon the facts of each case. In this case I hold no doubts that it did. (The respondent) was unilaterally changing the terms of the original contract of employment for (the applicant) to (his) detriment and against (his) wishes…" 11 But a demotion of an employee may still be contemplated by either the contract of employment under which that employee is engaged or, more significantly in this hearing, by the terms of a relevant State award or other industrial instrument which covers that employee. Mr Buttigieg's employment with the council is covered by the terms of the Local Government (State) Award. That is confirmed in the letter the council forwarded to him on Wednesday, 25 July, 2007 offering him the position of supply team leader with it. Relevantly, Clause 31, Disciplinary Procedures, of the Local Government Award provides that, among other things, a council may: "....demote the employee to a lower paid position, provided that the employee shall not suffer a reduction in the rate of pay for two weeks from the date of the demotion..." Mr Allegretto has pointed out that Mr Buttigieg's salary at the higher rate of pay was preserved for three weeks after the effective date of his demotion - one week more than required by Clause 31. 12 In my unreported decision of Monday, 27 October, 1997 in Federated Municipal and Shire Council Employees' Union of Australia v. Young Shire Council [Matter No. 3009 of 1997] I commented (at p.3) that the demoted employee in that case was not a "dismissal" for the purposes of S.84(1) because his: "…contract of employment with the council is governed by the terms of the State Local Government Award and, in particular,...(the equivalent provision to Clause 31 in the current Local Government Award) contemplates, among other things, his demotion. A demotion for local government employees at least is not an unilateral repudiation of his contract of employment with the council but is acknowledged as a condition of his employment because of the State award provision under which terms it is made…" 13 The matter in that case proceeded under S.130, as a matter for dispute resolution in compulsory conference proceedings. But that course was available because the employee concerned was a member of the relevant trade union - at that time the Federated Municipal and Shire Council Employees' Union of Australia - and it was competent to lodge a S.130 notification on his behalf. That is not a remedy available to Mr Buttigieg alone, however. The outcome is that it is only a registered industrial organisation which may mount such a case under S.130. For instance, in Roberts v. Mona Vale District Hospital (1975) 2 NSWLR 132 Street CJ of the State Supreme Court held that an individual employee who had been dismissed lacked the capacity to seek his own reinstatement in the equivalent of S.130 in the 1940 Industrial Arbitration Act without the involvement of a trade union duly registered as an employee association under that Act. A dispute between a single employee and his former employer did not constitute an industrial dispute so essential to the jurisdiction of State industrial tribunals at that time. 14 Mr Button has argued that the type of work to which Mr Buttigieg was demoted was entirely outside the supply work to which he was engaged by the council. There are apparently some fourteen other positions in the supply team in the council in which Mr Buttigieg worked. Mr Allegretto submitted in the proceedings that, in fact, the work to which Mr Buttigieg was demoted was still part of the team in which Mr Buttigieg was working. In any event, as I understand Mr Button's submissions, he is opposed to any demotion of Mr Buttigieg. 15 Moreover, although it may be unreasonable to direct Mr Buttigieg to perform certain types of work for the council completely outside the scope of his employment with it, eg labouring or cleaning work, I do not believe that Clause 31 has any real restrictions on it that would require the council to confine any demotion to work within the initial scope of the type of work he originally performed for the council. In my view, the type of work to which he has been demoted is still within the range of work to which his contract of employment with council would contemplate. Conclusion 16 Whilst Mr Buttigieg initially applied for the position of supply team leader with the council and that was the position with the council which he occupied up to the time of his dismissal, his contract of employment with the council must be read having regard to the provisions of Clause 31. That forms part of his contract of employment with the council, outlined in the letter offering him the position with the council in the first place. For that reason I believe that I must dismiss Mr Buttigieg's Part 6 application as falling beyond jurisdiction. P J CONNOR 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.