1
Fair Work Act 2009
s.394—Unfair dismissal
Diane Nesbitt
v
Rail Commissioner
(U2020/4348)
COMMISSIONER PLATT ADELAIDE, 20 JULY 2020
Application for an unfair dismissal remedy – jurisdictional objection – employee not
dismissed – application dismissed.
Introduction
[1] This Application relates the demotion of Ms Diane Nesbitt by the Rail Commissioner
on 20 March 2020. Ms Nesbitt contends that her demotion constitutes a dismissal and on 7
April 2020 lodged an application pursuant to s.394 of the Fair Work Act 2009 (Cth) (the
Act) in relation to the alleged termination of her employment.
[2] On 17 April 2020, the Rail Commissioner lodged a form F3 Employer Response
which contended that the demotion was not a dismissal and that the Fair Work Commission
(the Commission) did not have jurisdiction to deal with the matter on that basis.
[3] Ms Nesbitt disputed the Rail Commissioner’s position.
[4] This decision deals with the jurisdictional objection only.
[5] On 11 May 2020, my Associate corresponded with the parties concerning the filing of
submissions and advised that the matter would be heard on 24 June 2020.
[6] The parties provided a wealth of material most of which related to the merits. A digital
Court Book containing the material submitted was prepared to facilitate the hearing which
was held by telephone conference due to the COVID-19 Pandemic restrictions.
[7] In respect of the jurisdictional objection, it appears that the following relevant facts are
not in dispute:
The Rail Commissioner Tram Operations Enterprise Agreement 2018 (the
Agreement) covered and applied to Ms Nesbitt’s employment.
Prior to the demotion Ms Nesbitt was employed as a Senior Driver.
On 20 March 2020, Ms Nesbitt received a letter dated 19 March 2020 from Ms Anne
Alford, Deputy Rail Commissioner, advising that as a result of findings in respect of
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DECISION
E AUSTRALIA FairWork Commission
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Ms Nesbitt’s conduct she would be demoted to the position and classification of a
Tram Operator with effect from 20 March 2020.
The demotion was in accordance with clause 18 of the Agreement.
Hearing
[8] A hearing was conducted by way of telephone conference on 24 June 2020. A sound
file record of the telephone conference was kept. Ms Nesbitt was represented by Ms Minna
Davis from the Australian Rail, Tram and Bus Industry Union (ARTBIU) and Mr Shayne
Bakewell of EMA Consulting Pty Ltd represented the Rail Commissioner. Permission was
granted pursuant to s.596(2)(a),(b) and (c) of the Act.
[9] The parties expanded upon the material previously filed.
[10] The Rail Commissioner contended that:
Ms Nesbitt had not been ‘dismissed’ within the meaning contained in s.386(1) of the
Act.
Ms Nesbitt was demoted in accordance with clause 18 of the Agreement and the
Applicant bears the onus of establishing that she had been dismissed.
Moyle v MSS Security Pty Ltd1 supports the position that a change authorised by the
employment contract (or in this case the Agreement) does not amount to a dismissal.
This position is also supported by Kinnard v National Jet Systems Pty Ltd T/A
Cobham Aviation Services Australia;2 Singh v MSS Security Pty Ltd;3 Lollback v
University of Southern Queensland;4 Holland v Qantas Airways;5 Gorczya v RMIT
University.6
Clause 18 of the Agreement allows for demotion in certain circumstances, and those
requirements were met.
Clause 18.6 affirms an employee’s right to make an application but does not
determine the parties rights in respect of that application.
[11] Ms Nesbitt contended that:
The demotion was in accordance with clause 18 of the Agreement.
Whilst clause 18.5 of the Agreement states that a demotion does not constitute a
breach of the employee’s contract of employment or termination of the employee’s
employment, clause 18.6 expressly allows the employee to lodge an unfair dismissal
application. Evidence of common intent by way of the communications to
employees which was part of the Agreement consultation process supports this
interpretation.
Section 386(1) of the Act does not exhaustively define the term ‘dismissal’.
The demotion involved a significant reduction in remuneration of duties and thus
was a dismissal as a result of s.386(2)(c) of the Act. Despite the fact that the
employment relationship continued.7
Applicable Legal Principles and Instrument
[12] Section 394 of the Act states that a person who has been dismissed may make an
unfair dismissal application to the Commission for an order granting a remedy under Division
4 of the Act. As per s.12 of the Act, the definition of dismissed is found in s.386, as follows:
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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.”
[13] In Blair v Chubb Security Australia Pty Ltd (Blair)8 Commissioner Whelan stated the
following in relation to a demotion, repudiation of a contract and a termination at the initiative
of the employer:
“A demotion may amount to a repudiation of the contract by the employer. It may then
constitute a termination of employment at the initiative of the employer. In not all
circumstances will a demotion constitute a repudiation of the contract or bring about a
https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/s789gc.html#employer
https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/s26.html#paragraph
https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/s26.html#subsection
https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/s789gc.html#employer
https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/s12.html#training_arrangement
https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/s12.html#training_arrangement
https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/s12.html#training_arrangement
https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/s12.html#training_arrangement
https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/s12.html#training_arrangement
https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/s789gc.html#employee
https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/s12.html#dismissed
https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/s789gc.html#employer
https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/s12.html#conduct
https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/s12.html#conduct
https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/s789gc.html#employer
https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/s789gc.html#employer
https://www.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/fwa2009114/s12.html#dismissed
[2020] FWC 3710
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termination of employment at the initiative of the employer. The contract may, for
example, allow the employer to demote an employee in certain circumstances.
Even where a demotion would amount to a repudiation of the contract, at common
law, it may not be a “termination at the initiative of the employer” for the purposes of
the Workplace Relations Act 1996. Where the contract is silent, but an award or other
industrial instrument provided for under the Act allows the employer to demote an
employee, there will be no termination of employment for the purposes of section
170CE(1).” (emphasis added)
[14] Furthermore, in Elizabeth Gorczyca v RMIT University9 the Full Bench stated:
“[18] As we understand the submission of Mr Irving however, he argues that
notwithstanding this position the Act itself creates an inalienable right to contest a
termination if the criteria in s.170CD of the Act is attracted. His submission it is in
effect that the entitlement cannot be excluded either by operation of contract, award or
certified agreement. Put simply the Act gives a right to contest the termination in the
circumstances defined.
[19] The difficulty with this approach is, however, that we do not believe that there
has been a termination. Mr Bourke rightly argued that the question of whether there
had been a termination is a question of jurisdictional fact. Where there is a contract of
employment in existence and the contract is brought to an end, it is easy to establish
that there is a termination. However, in a case such as this termination must be implied
from all of the circumstances, for in reality, the appellant continues to work for the
respondent. On her behalf it was argued in effect that the provisions of s.170CD(1B)
of the Act mean there has been a termination because of her demotion with the
resultant loss of income. 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.
[20] Our conclusion in this regard is fortified by the decision in Quickenden v
Commissioner O'Connor.” (citations omitted) (emphasis added)
[15] Whilst the decisions of Blair and Gorczyca relate to s.170CE(1) of the Workplace
Relations Act 1996 (Cth), the predecessor to the Fair Work Act 2009, the principles are
relevant when considering s.386(1)(a) of the Act. For completeness, section 170CE(1),
provided as follows:
“170CE Application to Commission to deal with termination under this Subdivision
(1) Subject to subsection (5), an employee whose employment has been terminated by
the employer may apply to the Commission for relief in respect of the termination of
that employment:
https://www.fwc.gov.au/documents/wrasections/s170CE.html
https://www.fwc.gov.au/documents/wrasections/s170CE.html
[2020] FWC 3710
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(a) on the ground that the termination was harsh, unjust or unreasonable; or
(b) on the ground of an alleged contravention of section 170CK, 170CL,
170CM or 170CN; or
(c) on any combination of grounds in paragraph (b) or on a ground or grounds
in paragraph (b) and the ground in paragraph (a).”
[16] Clause 18 of the Agreement, which covers Ms Nesbitt and the Rail Commissioner,
provides as follows:
“18 DEMOTION DUE TO MISCONDUCT OR UNSATISFACTORY
PERFORMANCE
18.1 Where there is serious consideration an employee is to be terminated based on
a finding of:
serious misconduct;
continual misconduct; and/or
continual unsatisfactory performance,
the Rail Commissioner can unilaterally elect to demote that employee instead of
terminating their employment.
18.2 The decision to demote an employee can be made for a set period of time
or indefinitely.
18.3 Demotion includes, but is not limited to;
Demotion to a classification with lower remuneration within the Rail
Commissioner; and/or
Demotion to a classification with the same remuneration but with lower status in
the Rail Commissioner organisational structure.
18.4 An employee cannot be demoted to a transitional classification (i.e.
Intermediate Tram Operator or Trainee Senior Tram Operator).
18.5 The act of demoting an employee does not constitute a breach of the
employee’s contract of employment or termination of the employee’s employment,
or affect the continuity of the employee’s employment for any purpose.
18.6 Notwithstanding clause 18.5, this clause does not preclude an employee from
being able to undertake an unfair dismissal application under the Fair Work Act 2009
(Cth) or a dispute under this Agreement.”
[17] There is no dispute that the demotion was in accordance with clause 18 of the
Agreement.
[18] The ARTBIU contended that clause 18.6 of the Agreement provided Ms Nesbitt with
the ability to pursue an unfair dismissal application. A plain reading of clause 18.6 reveals
[2020] FWC 3710
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that there is no barrier to the lodgement of a s.394 application or processing a dispute
(potentially pursuant to s.739 of the Act).
[19] There is some dispute over the intent of the parties with respect to the operation of
clause 18.6. Regardless of the parties intention, an agreement is unable to confer powers
under Part 3-2 of Division 1 of the Act on the Commission that it does not have. If an
applicant has not been dismissed within the meaning of s.386 of the Act, clause 18.6 of the
Agreement cannot confer powers on the Commission to determine an unfair dismissal claim.
[20] The capacity for private arbitration rights to be conferred on the Commission via a
dispute resolution process is a different matter. Clause 18.6 provides a right for Ms Nesbitt to
process her complaint as a dispute under the Agreement. This approach appears to remain
available to Ms Nesbitt.
[21] I find that the demotion was in accordance with the applicable Agreement and that,
having applied the authorities discussed, Ms Nesbitt has not been dismissed in accordance
with the meaning contained in s.386(1)(a) of the Act. Given that there was no dismissal under
s.386(1)(a), consideration has not been given to whether s.386(2)(c) of the Act applied.10
[22] Accordingly, this application must be dismissed.
[23] An Order11 reflecting this decision will be issued.
COMMISSIONER
Appearances (by telephone):
M Davis of the Australian Rail, Tram and Bus Industry Union on behalf of the Applicant.
S Bakewell (Paid Agent) on behalf of the Respondent.
Hearing (Conference) details:
2020.
Adelaide:
June 24.
Printed by authority of the Commonwealth Government Printer
PR721003
1 [2016] FWCFB 372
THE FAIR SEAL OF THE THE KCOMMISSION
[2020] FWC 3710
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2 [2017] FWC 6055
3 [2016] FWC 1857
4 [2014] FWC 2011
5 [2011] FWA 3778
6 PR922414 (AIRCFB, Polites SDP, O’Callaghan SDP, Hingley C, 12 September 2002)
7 Scott Harrison v FL Smidth Pty Limited T/A FLSmidth Pty Limited [2018] FWC 6695; Phillip Moyle v MSS Security Pty;
Leigh Priest v Albury Blue Logistics [2018] FWC 1810. Ltd [2016] FWCFB 372; Visscher [2009] HCA 34; Andrew
Kenneth Charlton v Eastern Airlines Pty Limited [2006] AIRC 393
8 PR936527 (AIRC, Whelan C, 19 August 2003)
9 PR922414 (AIRCFB, Polites SDP, O’Callaghan SDP, Hingley C, 12 September 2002)
10 Moyle v MSS Security Pty Ltd [2016] FWCFB 372
11 PR721004
http://www.airc.gov.au/alldocuments/PR936527.htm
