By Charles Power
If you change aspects of an employee’s job, you will need to be careful if the employee objects. Why? Because you might find that you have actually dismissed the employee – in the eyes of the law anyway!
If an employee refuses to accept a significant reduction in job status, duties and responsibilities, they might be able to walk away from the employment relationship and sue you for wrongful dismissal.
And sometimes, even provisions in the employment contract that allow you to make changes to an employee’s role can be limited.
A recent case dealing with these issues was decided in the Victorian Supreme Court (Whittaker v Unisys Australia Pty Ltd).
The case concerned a global IT company who employed a person as Vice President and General Manager of a section of the employer’s business in the Asia Pacific region. After 6 years’ service, the manager was told to relinquish those duties to someone else and to undertake a significant 12 month project. The manager refused, walked away from the relationship and sued the employer for damages for breach of employment contract.
The Court noticed that the manager would have received the same pay and reported to the same people if he had undertaken the project. However, the manager had no guarantee that the project would continue after 12 months and the status and responsibilities of the new role were significantly less than his old role.
The employment contract contained a provision that entitled the employer to require the manager to perform other duties from time to time within the limits of his skill base, competence and training. The Court ruled that the manager had the skills and experience to do the job and given that it would only ran for 12 months it met the condition arising from the words ‘from to time to time’.
However, the Court ruled that the employer could not rely on this clause because it only allowed the employer to add duties to the manager’s existing role – not move the manager to a new role in which he would only performed some of the duties of the old role.
The Court awarded the employee damages equal to the pay he would have received if the employer had given him proper notice – which was 6 months under the employment contract.
So what can you learn form this case? Stop and consider these issues before you unilaterally decide to change an employee’s conditions of employment – or you could be sued for wrongful dismissal!