The Case

Mr Moyle was given notice by MSS Security Pty Ltd (MSS) that he and other security guards would be required to work at new sites. When Mr Moyle moved to the new site:

• his classification changed from level 5 to level 3 under the Security Services Industry Award 2010 (the Award) as he was no longer a supervisor;
• he was paid $1 less per hour; and
• he changed from night shift to day shift at his request and, as he was no longer working night shift, he was not paid an additional loading.

Mr Moyle commenced unfair dismissal proceedings against MSS, claiming that he had been demoted and that this demotion constituted unfair dismissal.

The Verdict

MSS argued that the Fair Work Commission (FWC) did not have jurisdiction to hear the matter because Mr Moyle had not been dismissed.

At first instance, the FWC found it had jurisdiction to hear Mr Moyle’s claim.

MSS appealed. The Full Bench of the FWC held that Mr Moyle’s employment contract permitted MSS to:

• require Mr Moyle to work in a security guard role at any of its sites;
• require Mr Moyle to perform any security guard duties that he was trained in and qualified to perform; and
• pay Mr Moyle for the requisite role he was performing at the time consistent with the Award.

The Full Bench found there was no repudiation or breach by MSS and that Mr Moyle’s employment contract continued at the new site.

As such, Mr Moyle had not been dismissed by MSS and was unable to progress his unfair dismissal claim.

Although the Full Bench was not required to consider it, section 386(2)(c) of the Fair Work Act 2009 (Cth) provides that a demotion will not constitute a dismissal where:

• the employee remains employed with the employer that effected the demotion; and
• the demotion did not involve a significant reduction in the employee’s remuneration or duties.

The Lesson

There are very limited circumstances where an employer can lawfully demote an employee. A demotion may be lawful where:

• the employee’s employment contract or industrial instrument contains an express ability to demote; and
• the employee consents to the demotion.
• The Full Bench noted that had Mr Moyle’s contract not permitted the above variations, a reduction of $1 per hour in wages and the removal of the supervisor allowance for a low-paid, award-dependent employee may well have been a “significant reduction” constituting unfair dismissal.

Please note: Case law is reported as correct and current at time of publishing. Be aware that cases in lower courts may be appealed and decisions subsequently overturned.