Can a demotion be used to justify an unfair dismissal claim?

Employee alleges she was 'embarrassed and humiliated' and 'there was no point in staying'

Can a demotion be used to justify an unfair dismissal claim?

The Fair Work Commission (FWC) has resolved a dismissal dispute after an employee claimed she was unfairly dismissed upon her demotion to do administrative work.

The employee was on a fixed-term contract as a lawyer and said she was tasked with administrative work instead of “legal duties”. The employee alleged that she was not given “opportunities to engage in any of the other duties in her position description” while doing work “commonly done by an administrative assistant”.

According to records, the employee met her direct line manager to discuss the former’s performance. She recalled that she sought feedback on her work and her direct line manager told her that her work “was not well received by other managers”, but the line manager assured her that she had not made a final assessment.

Shortly after, the employee was then informed that the “backlog of legal advice requests was clearing” and “fewer new requests were coming in”, so the employee was tasked to work on Freedom of Information (FOI) and privacy matters, “as this was where the [business] had a current need”.

As the employee started to work on FOI and privacy matters, there was no change in her grade, pay or fixed-term tenure.

She then resigned and accepted an external offer of employment. She alleged that her work in the FOI team amounted to a demotion. Before the FWC, she said that she was forced to resign, and while she “acknowledges that she tendered her resignation, she contends that her role was obsolete due to the actions taken by the [employer] and there was no point in staying”. She also said she was “embarrassed and humiliated”.

In its decision, the FWC said that a person had not been dismissed if they are demoted, and the demotion does not involve a significant reduction in remuneration or duties.

It also found the employer’s direction for the employee to work in the FOI team was “a reasonable direction”. It ruled that it was not a demotion “as there was no reduction in applicant's grade or classification”.

The FWC found the employer did not perform an act that was “intended to end or had the probable result of ending [her] employment”.

Thus, the FWC ruled that her voluntary resignation, not dismissal, ended the employment.

The decision was handed down on 28 January.

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