Home - A redundancy, demotion or forced resignation?

UpdatesJun 15, 2018

A redundancy, demotion or forced resignation?

The Fair Work Commission (FWC) determined that an employee resigned from his employment and was not made redundant or forced to resign, after he was initially removed from his position as executive director.

By Lauren Drummond

The Fair Work Commission (FWC) determined that an employee resigned from his employment and was not made redundant or forced to resign, after he was initially removed from his position as executive director.

In Stringfellow v Commonwealth Scientific and Industrial Organisation (CSIRO) (2018), the unusual circumstances surrounding the appointment of an executive director were as follows:

After nearly three years in the role, Dr Stringfellow was removed as executive director by the Board of Pawsey due to his poor performance.

Dr Stringfellow asserted that his employment with CSIRO and appointment as executive director were one in the same. Accordingly, he argued that his removal as executive director by the Board also resulted in his dismissal by CSIRO and he sought to negotiate a settlement regarding his exit from CSIRO.

CSIRO asserted that it was not dismissing Dr Stringfellow and sought to discuss alternative positions with Dr Stringfellow. In the meantime, Dr Stringfellow continued in the role of executive director until a replacement could be arranged.

Dr Stringfellow then commenced a period of leave once he ceased performing the role. When settlement negotiations did not progress to Dr Stringfellow’s satisfaction, he insisted that he be reinstated to the position of executive director or that he would seek reinstatement via an application to the FWC.

When this was unable to be carried out, Dr Stringfellow said he had been forced to cease his employment with the CSIRO due to its conduct and he applied to the FWC for an unfair dismissal remedy.

Was the doctor dismissed?

The FWC reviewed the actions of the CSIRO and determined that it had not dismissed Dr Stringfellow. It found that once Dr Stringfellow’s executive director appointment ended, his employment with the CSIRO continued in the role of facilities program director.

The CSIRO had sought to maintain Dr Stringfellow in employment and provide him with a position commensurate to the remuneration received and responsibilities held as executive director. Alternatively, given Dr Stringfellow’s lack of interest in other positions, CSIRO had indicated its willingness to explore a settlement and was seeking authority to do so.

The FWC found that Dr Stringfellow had discretion to end the employment and it was not action forced upon him by the CSIRO. Having commenced a period of leave, there was no urgency to issue the ultimatum in the circumstances that he did.

Lessons for employers

The case raises interesting issues in relation to whether an employee can be required to undertake an alternative role under an existing contract of employment.

A similar issue arose in Adcock v Blackmores Limited & Ors (2016), where an employee was found to have resigned after refusing to accept alternative positions and then asserted that the contract had been repudiated by the employer.

The contract contained a term that the employer could assign other tasks or duties to those stipulated in the primary position description, provided it did not involve a diminution in remuneration, status or responsibility. A similar term existed under Dr Stringfellow’s employment agreement.

Where an employment agreement contains a term that permits the employer to assign other or alternative duties, it gives the employer flexibility in circumstances where changes are required to the primary position.

However, such ‘flexibility’ clauses do not afford employers unlimited scope to change the duties and tasks encompassed in a role. It would be prudent to include a proviso along the lines of the term that was contained in Dr Stringfellow’s employment agreement. An example might be:

You agree that the employer may change, add or eliminate duties, responsibilities and/or tasks associated with your role, provided that the employer will undertake reasonable consultation with you about such changes and any change will not diminish in overall terms your status and/or remuneration.

Copied