Is it a dismissal if you reduce an employee’s working hours?

Employer says it was under budget – despite hiring another person for same role

Is it a dismissal if you reduce an employee’s working hours?

Under Australian labour laws, employees are not automatically fired if management assigns them less work than normal.

However, disputes can happen if the change comes from a breach of the employment contract or a substantial change in the employment conditions.

In this case, the employer said it would reduce the employee’s work hours, claiming it was underfunded. Afterward, the employee started to experience alleged “harassment” from co-workers and eventually resigned.

Was there unfair dismissal?

Background of the case

The employee worked with the Nullagine Community Resource Centre Association (NCRC) as an assistant coordinator with 38 working hours per week.  Part of his contract said any variation to the terms must be by mutual agreement and in writing between the parties.

He said that around February 2021, the NCRC’s committee of management chairperson went to his desk and “held his hands out so that the employee could not pass him and had to remain in the corner of the room.”

The chairperson then informed him “that his job description had changed, [and] he would now be working three hours a day and for three days a week and that the number of staff would be reduced.”

Around March, the employee said that when he arrived at the office, the chairperson mentioned “the reduction in hours and asked him which of the three working days he would work.” The employee said, “The hours did not comply with [his] contract.”

Later, the employee had an incident with the secretary of the committee. The locks to the office had been changed one weekend, and the personnel all believed that the employee kept the keys. The secretary then demanded the keys back and allegedly told the employee that he was “useless.” She also said she would call the police if he did not return them.

It was around this period that the employer hired another coordinator.

The employee said that his experiences with the employer’s committee made him “feel unsafe in the workplace.”

He then visited the chairperson’s home and gave his letter of resignation, which had an immediate effect.

In his letter, he said he was resigning because the “working environment [was] extremely stressful.” The chairperson then read the letter, confirmed his resignation and said, “best of luck.”

In a recent HRD report, a worker argued that he was dismissed from employment because the company gave him a lesser workload, causing him “financial difficulty.”

In another dismissal story, the Fair Work Commission settled the issue of whether kicking an employee out of the company’s WhatsApp group was considered employment termination.

The parties’ arguments

The employee said he was “the target of an orchestrated and sustained conduct of harassment toward him by members of the NCRC committee.”  

He said the staff “wanted him gone from the organisation and appointed a person to the coordinator role despite having told [him] that they could only sustain one employee.”

For the employer’s defence, the chairperson said that “there was a reduction in funding for the NCRC and consequentially the staffing levels and hours of operation of services needed to be reduced.”

The chairperson also said he informed the employee “that he would need to reduce his hours to 15 hours per week,” contrary to the latter’s claim.

Was there resignation or dismissal?

In this case, the Western Australian Industrial Relations Commission found the employer “unilaterally changed the terms of [his] employment contract by reducing his working hours from 38 hours per week to 9 hours per week.” 

“The evidence of the parties differed as to whether the reduction was to 15 or 9 hours,” the decision said.

 

“Differing accounts favour the employee… his working hours were to be reduced to 9 hours per week.  However, in both scenarios... the change is a significant one… that is at the root of the contract of employment,” the Commission added. 

 

Thus, it ruled the change “breached the terms of [his] employment contract.”  

 

Consequently, it said the employee “is entitled to consider his employment had been terminated because of the conduct and actions of his employer.”

 

The Commission awarded him compensation for the loss of income he would have otherwise earned had his employment continued up to the date of the case’s hearing.

 

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