1
Fair Work Act 2009
s.394—Unfair dismissal
Navdeep Singh
v
MSS Security Pty Ltd
(U2015/8926)
COMMISSIONER WILLIAMS PERTH, 30 MARCH 2016
Termination of employment - jurisdiction.
[1] This matter concerns an unfair dismissal remedy application made by Mr Navdeep
Singh (Mr Singh or the applicant) under section 394 of the Fair Work Act 2009 (the Act). The
respondent is MSS Security Pty Ltd (MSS or the respondent).
Background
[2] The respondent has raised a jurisdictional objection that the applicant has not been
dismissed.
[3] In short, the respondent says the applicant was demoted from a supervisory position on
8 June 2015 as the result of a disciplinary investigation and the respondent advised him at that
time that it intended to return him to the lesser position of a Security Officer (Revenue
Protection Officer). Further the respondent submits that the applicant’s contract contains a
term allowing demotion without termination and accordingly what has occurred is not a
termination of the applicant’s employment and consequently there is no jurisdiction for the
Commission to hear the unfair dismissal remedy application.
[4] The matter was listed for a hearing to deal with the jurisdictional objection only. At
the hearing Mr Singh gave evidence and the respondent’s called two witnesses being Mr Paul
Price (Mr Price) the WA General Manager for MSS and Mr David Oliver (Mr Oliver) the WA
State Operations Performance Manager and Business Manager (PTA) for MSS.
The evidence and factual findings
[5] Mr Singh was first employed by MSS in November 2008. His employment contract
from that year states that he was employed as a Security Officer.
[6] Some time later he was assigned as a Revenue Protection Officer in the PTA.
[2016] FWC 1857 [Note: An appeal pursuant to s.604 (C2016/3445) was
lodged against this decision - refer to Full Bench decision dated 31 May
2016 [[2016] FWCFB 3546] for result of appeal.]
DECISION
E AUSTRALIA FairWork Commission
http://www.fwc.gov.au/decisionssigned/html/2016FWCFB3546.htm
[2016] FWC 1857
2
[7] Around September 2010 he was appointed to the role of Operations Supervisor at the
PTA. In this position he was on an annual salary. He was provided at that time with a new
employment contract for the role.
[8] On 21 November 2014 he signed a new employment contract that changed him from
an annual salary to an hourly wage rate.1 This PTA Operations Supervisor contract was the
third contract of employment he had signed since starting with the respondent in 2008. This
contract was operative as at June 2015.
[9] Mr Singh accepts that even though he has had three different contracts of employment
he has been employed in one continuous period of service.
[10] As a PTA Operations Supervisor Mr Singh accepts he would sometimes perform
revenue protection duties. He would also at times work an overtime shift as a Revenue
Protection Officer rather than as the PTA Operations Supervisor.
[11] Mr Singh’s PTA Operations Supervisor contract signed in November 2014 states that:
“Your duties are outlined in the attached Employee Standing Instructions, Site
Operating Procedures (SOP’s) and as directed by management.”
[12] The contract includes the following:
“Terms of employment
The terms of this contract of employment are reliant on you remaining in the role of
PTA Operations Supervisor.
Your employment with the company will be dependent upon the company retaining the
contract with the PTA to provide security services at the site where you work and the
PTA requiring MSS Security to provide the PTA Operations Supervisor role.
Should you no longer be required to fulfil this role due to performance or client
request, the terms of this contract will cease and you will transition to the conditions
of the Security Services Industry Award 2010, or other agreement as applicable to the
new site/position to which you are appointed.
…
This letter and the attached ‘Standard Conditions of Employment’ form your contract
of employment. You are also required to comply with the Employee Standing
Instructions. Signing this contract of employment indicate you have received, read and
understood the contents of the employee Standing Instructions and your obligations to
comply with the Standing Orders.” (Underlining added)
[13] Clause 11 of the Standard Conditions of Employment which were also signed by Mr
Singh on 21 November 2014 state:
[2016] FWC 1857
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“The title of your position and its major duties and accountabilities will be as contained
in the security officer standing instructions. Subject to consultation with you, the
company reserves the right to vary these duties at any time.”
[14] On 20 February 2015 a package was delivered to Mr Price at his office which
contained a letter from employees of MSS at the PTA which was signed by 31 Revenue
Protection Officers. The letter raised concerns about the conduct of Mr Singh as the
Supervisor however it did not provide many specifics.
[15] After an investigation into the concerns raised by these employees it was decided that
a letter of allegation would be put to Mr Singh to allow him an opportunity to respond to the
concerns raised. On 22 May 2015 Mr Oliver phoned Mr Singh and advised him that he would
be issuing him with a letter of allegation. He generally explained the allegations that were
outlined in the letter and told him that he would be stood down with pay whilst the
investigation was ongoing. Mr Oliver then sent Mr Singh that letter of allegation.2
[16] Following this there was a series of backwards and forwards exchanges by email and
ultimately Mr Singh provided his response to the letter of allegations. This was followed by
some meetings. At a meeting on 8 June 2005 with Mr Oliver and Mr Price, Mr Singh was
advised that the company had found his conduct as an Operations Supervisor had at times
been inappropriate and had determined that he was no longer suitable for a supervisory role.
[17] I note that the Commission is not required to consider whether or not the company’s
judgment on Mr Singh was correct. The Commission has not assessed whether or not Mr
Singh had acted inappropriately as a Supervisor.
[18] Mr Singh’s agrees in his evidence that at this meeting he was advised the respondent
had found he was no longer suitable for supervisory roles and they would transfer him to a
Revenue Protection Officer role. He agrees at no stage was he advised that his employment
was terminated. He agrees he was told he could take some annual leave or cash some out at
the Supervisor rate of pay prior to returning to work if he wanted to. He received a letter
confirming all of this the following day.3
[19] The next day Mr Oliver issued Mr Singh a letter dated 9 June 2015.4 The letter is
headed as follows:
“Letter of Warning/Demotion”
[20] The letter traverses at length the various allegations and Mr Singh’s responses and
respectively explains why the allegations are found to be either partially substantiated or
substantiated.
[21] After this the letter says:
“Accordingly this letter will serve as a Letter of Warning.
…
In light of our findings, we have determined that you are no longer suitable for the
Supervisor/supervisory positions. As such, we are returning you to the role of
[2016] FWC 1857
4
Revenue Protection Officer. We will prepare a new employment contract for you
shortly. Prior to returning to a Revenue Protection Officer role you may like to take a
period of annual leave, or alternatively cash some leave out (subject to legislative
provisions), while you are still on your Supervisor wage rate, as annual leave is paid
at the rate that it is taken and you currently have over 300 hours accrued.
…
Please note any future breach or failure to comply with the MSS Employee Standing
Instructions will not be tolerated and will result in disciplinary action up to and
including termination of your employment.
...
If you have any queries pertaining to the content of this warning letter, please contact
me…”
[22] Mr Oliver tried to contact Mr Singh by email and telephone on a number of
subsequent occasions on 11, 16 and 19 June 2015 but received no response from Mr Singh.
[23] Mr Oliver sent Mr Singh a letter on 22 June 2015 regarding his inability to be
contacted and his absence from work asking Mr Singh to contact him but Mr Singh did not.
[24] Mr Singh attended the respondent’s premises on 19 June 2015 to drop off some leave
forms. Accompanying the leave form were a number of medical certificates certifying him as
having a medical condition on 8 and 10 June 2015 and being unfit for work on 18 June 2015.
With these Mr Singh provided a completed MSS Security Pty Ltd Notification or Application
for Leave form stating he was seeking personal leave of which the first working day of leave
was Monday, 8 June 2015 and the last working day of that leave was Sunday, 21 June 2015
and the total number of days leave being claimed was seven.
[25] Mr Singh attended Court on 29 and 30 June 2015 and received payment from the
respondent for these days.
[26] Mr Singh argues the respondent’s actions means that he was terminated on 9 June
2015.
[27] On 30 June 2015 Mr Singh lodged his application for an unfair dismissal remedy.
[28] On 20 July 2015 Mr Singh submitted to MSS a form to cash out 80 hours of annual
leave. He has further corresponded with MSS staff regarding this matter on 24 July 2015 and
2 August 2015.
[29] Mr Singh remains in possession of his company uniform.
[30] Mr Singh continues to have access to MSS systems such as the learning management
system and the employee portal for online payslips.
[31] Mr Singh continues to receive his regular pay slip from MSS.
[2016] FWC 1857
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[32] Mr Singh has not been paid out any entitlement such as annual leave accruals or any
other termination monies that would ordinarily be paid out on termination.
The legislation and relevant principles
[33] With respect to the Commission determining the respondent’s jurisdictional objection
prior to considering the merits of the substantive unfair dismissal remedy application section
396 of the Act, as set out below, expressly requires that jurisdictional matters such as whether
a person was protected from unfair dismissal must be decided before considering the merits of
an application. It is a procedural decision to be made by the Commission whether this is done
as a preliminary hearing as was the case here or otherwise.
“396 Initial matters to be considered before merits
The FWC must decide the following matters relating to an application for an order
under Division 4 before considering the merits of the application:
(a) whether the application was made within the period required in subsection
394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal
Code;
(d) whether the dismissal was a case of genuine redundancy.”
[34] Section 394 of the Act, as set out below, provides that only a person who has been
dismissed may apply for an unfair dismissal remedy.
“394 Application for unfair dismissal remedy
(1) A person who has been dismissed may apply to the FWC for an order under
Division 4 granting a remedy...”
[35] Section 385 of the Act, as set out below, unsurprisingly requires that the Commission
can only be satisfied that a person has been unfairly dismissed if indeed they have been
dismissed.
“385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and...”
[36] Section 386 of the Act, as set out below, provides that a person has been dismissed if
their employment has been terminated on the employer’s initiative. More will be said about
section 386(2) (c) further below.
[2016] FWC 1857
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“386 Meaning of dismissed
(1) A person has been dismissed if:
(a) the person’s employment with his or her employer has been terminated
on the employer’s initiative; or
(b) the person has resigned from his or her employment, but was forced to
do so because of conduct, or a course of conduct, engaged in by his or
her employer.
(2) However, a person has not been dismissed if:
(a) the person was employed under a contract of employment for a
specified period of time, for a specified task, or for the duration of a
specified season, and the employment has terminated at the end of the
period, on completion of the task, or at the end of the season; or
(b) the person was an employee:
(i) to whom a training arrangement applied; and
(ii) whose employment was for a specified period of time or was,
for any reason, limited to the duration of the training
arrangement;
and the employment has terminated at the end of the training arrangement; or
(c) the person was demoted in employment but:
(i) the demotion does not involve a significant reduction in his or
her remuneration or duties; and
(ii) he or she remains employed with the employer that effected the
demotion.
(3) Subsection (2) does not apply to a person employed under a contract of
a kind referred to in paragraph (2)(a) if a substantial purpose of the
employment of the person under a contract of that kind is, or was at the time of
the person’s employment, to avoid the employer’s obligations under this Part.”
[37] The respondent’s objection is that Mr Singh’s employment contract contains a term
allowing demotion without termination and consequently his demotion did not involve
termination of Mr Singh’s employment and so Mr Singh has not been dismissed within the
meaning of section 386(1) (a) of the Act. Consequently Mr Singh is not a person who is able
to make an unfair dismissal remedy application.
[38] It is clear from the evidence that the respondent employer did not express any
intention to terminate Mr Singh’s employment. Nothing was put in writing to him that he was
[2016] FWC 1857
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dismissed or that his employment was terminated. Mr Singh concedes in his evidence that he
was never told he was dismissed or that he was terminated. The respondent’s actions
throughout have been consistent with not intending to terminate or dismiss Mr Singh. Nothing
the respondent has done amounts to an express termination of his employment.
[39] Mr Singh has not resigned from his employment. Mr Singh simply has not returned to
do any work for the respondent since the meeting on 9 June 2015. He has not advised his
employer verbally or in writing that he is resigning from his employment. This then is not a
case of constructive dismissal under section 386(1) (b) of the Act.
[40] What Mr Singh argues is that the respondent has repudiated his employment contract.
Whether there has been a repudiation is a question of fact. Not every breach of contract is a
repudiation. A repudiatory breach does not automatically terminate the contract but confers an
elective right of termination on the innocent party.
[41] There is a body of case law that deals with this situation. Deputy President Gooley in
the matter of Terence Lollback v the University of Southern Queensland5 considered the
circumstances where a demotion is not a termination of employment. This particular matter
concerned a circumstance where an employee had been demoted which the employer argued
was authorised by the terms of an enterprise agreement and so was not a termination of
employment and so not a dismissal.
[42] After considering the line of authority Deputy President Gooley found that she was
bound by the decision of the Full Bench of the Australian Industrial Relations Commission in
Elizabeth Gorczyca v RMIT University6 which had concluded that:
“The respondent argues there has not been a termination because the certified
agreement permits the demotion without regard to the income loss and provides in
effect that it is not a termination. We think that the latter proposition is correct. There
has not been a termination because the certified agreement operates to preclude there
being one in the circumstances of this case. Put another way we think, at law there has
been no termination and if there has been no termination we do not see,
notwithstanding the provisions of s.170CD(1B) that there has been a termination for
purposes of the Act.”7
[43] Deputy President Gooley also considered another Full Bench decision of the
Australian Industrial relations Commission in Charlton v Eastern Australian Airlines Pty
Limited8 which turned its attention more broadly to when the termination of employment
occurs and held as follows:
“[32] Consistent with the decision in Boo Hwa Chan, a termination of employment
occurs when a contract of employment is terminated. This necessarily occurs when the
employment relationship comes to an end. However, it can also occur even though the
employment relationship continues. Where a contract of employment has been
terminated, but the employment relationship continues, this will be because a new
contract of employment has come into existence. Therefore, whether the appellant's
demotion involved his employment being "terminated by the employer" within the
meaning of s.170CE turns on whether his contract of employment was terminated
notwithstanding the continuing employment relationship. This question is answered by
[2016] FWC 1857
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reference to general law principles relating to the termination of contracts of
employment, unconstrained by the Convention.
[33] The question of when a demotion constitutes a termination of employment within
general law principles relating to termination of contracts of employment,
unconstrained by the Convention, was given careful consideration by the Full Court of
the Supreme Court of South Australia in Advertiser Newspapers Pty Ltd v IRC &
Grivell. We respectfully adopt that analysis. Although the decision related to a
different statutory context, that context required a consideration of general law
principles that are equally applicable in the present case.
[34] Unless the contract of employment or an applicable award or certified/workplace
agreement authorises an employer to demote an employee, a demotion, not agreed to
by the employee, that involves a significant reduction in remuneration will amount to a
repudiation of the contract of employment. If that repudiation is accepted, either
expressly or by conduct, then the contract of employment is terminated. If, in such
circumstances, the demoted employee then remains in employment with the employer,
this occurs pursuant to a new contract of employment in respect of the demoted
position. It may be noted that where the employment continues with the employee
allegedly acquiescing in a reduction in salary or other terms of employment, difficult
questions may arise as to whether the continued employment involves the continuation
of the original contract of employment (but with the employer breaching that contract
by paying the reduced salary), a consensual variation of the terms of the original
contract or the termination of the original contract and a substitution of a new
contract of employment.” (Underlining added)
[44] The Deputy President in that case accepted that the demotion authorised by the
applicable enterprise agreement was not a termination.
[45] This principle, that a demotion arising from the application of a clause in an agreement
is not a termination of employment at the initiative of the employer nor is it a repudiation of
the contract of employment, was earlier accepted and applied by Senior Deputy President
Drake in the case of Michelle Holland v Qantas Airways Limited.9
[46] The broader statement of principle identified by the Full Bench above is that a
demotion of an employee by an employer which involves a significant reduction in
remuneration that is not agreed to by an employee will not amount to a repudiation of the
employment contract if it is authorised by a contract of employment, an applicable award or a
certified/workplace agreement.
[47] More recently a Full Bench of the Commission in the case of Phillip Moyle v MSS
Security Pty Ltd10 simplified the applicable principle as follows:
“[12] ...Whether or not the exception in s. 386 (2) (c), properly construed, was
applicable, it remains necessary for Mr Moyle to demonstrate at the outset that he had
been “dismissed” within the meaning of s. 386 (1).
[13] An action taken by an employer to change the remuneration and duties of an
employee could not constitute a dismissal under s. 386 (1) where the change was one
authorised by the contract of employment.”
[2016] FWC 1857
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[48] Applying these principles to the facts of this case the evidence is that Mr Singh’s
contract of employment contained the following term:
“Should you no longer be required to fulfil this role due to performance or client
request, the terms of this contract will cease and you will transition to the conditions of
the Security Services Industry Award 2010, or other agreement as applicable to the
new site/position to which you are appointed.”
[49] After investigating the concerns raised by other employees the respondent was
dissatisfied with Mr Singh’s performance as a Supervisor and no longer required him to fulfil
the role of PTA’s Operations Supervisor and he was to then be returned to the role of Revenue
Protection Officer. This action of the respondent, changing his remuneration and duties, was
expressly authorised by his contract of employment and so did not constitute a dismissal
under section 386(1) of the Act.
[50] Consequently I find Mr Singh has not been dismissed by the respondent. Consequently
Mr Singh is not able to make an application under section 394 of the Act.
[51] I uphold the respondent’s jurisdictional objection. Mr Singh’s unfair dismissal remedy
application will be dismissed for want of jurisdiction. An order to that effect will now be
issued.
COMMISSIONER
Appearances:
N. Singh on his own behalf.
S. Pedlow on behalf of the respondent.
Hearing details:
2016.
Perth:
January 18.
Final written submissions:
Applicant, 3 February 2016.
Respondent, 1 February 2016.
Printed by authority of the Commonwealth Government Printer
Price code C, PR578314
[2016] FWC 1857
10
1 Exhibit R2, Attachment DO1.
2 Ibid., Attachment DO20.
3 Transcript at PN198 – PN202.
4 Exhibit R2, Attachment DO23.
5 [2014] FWCFB 2011.
6 PR922414.
7 Ibid., at [19].
8 PR972773.
9 [2011] FWA 3778.
10 [2016] FWCFB 372.
