This wasn’t what I signed up for!!!

I’ve been asked several times about whether or not an employer is able to make changes to an established position description, and what a worker’s rights are if this should happen. This is something that I have heard of happening far more than I would have expected and often without any consultation with the employee.

As with a few areas of employment law, workers are confused as to whether or not they just have to accept what their employer dictates in fear of being out of work if they don’t.  When it comes to having your position changed, without your agreement, you do have rights that your employer needs to comply with. However it’s not just a simple case of black or white. So before you start recommending to friends or clients that they march down to human resources and utter a few choice career ending sentences about those proposed changes, let’s have a good look at those grey areas.

Without consultation is the key term to take away from this article. Many human resources managers believe that making some quick changes is a simple way to cut costs, but they need to be aware that there are some quite considerable legal implications if workers are not consulted. By going down this route an employer can expose themselves to litigation for a broken agreement. An employee should be aware of all terms and conditions of their employment before they even begin their first day on the job, if proper care is taken and research completed. Essentially it’s incumbent on the employee from the very start to ensure that their rights are protected and know that redress is available should a breach of contract arise from the actions of an overzealous HR manager.

When you are first engaged in a new position, while not a requirement it is best practice for your human resources department or manager to provide you with a contract of employment – which will often include a position description. These descriptions are an excellent starting point for any new employment as it sets out what is expected of the new worker, what their obligations to the company are and any rights and privileges they are entitled to under this agreement.

The modern workplace is a living breathing beast and must be able to adapt to changes be they competition driven or fiscal. The employment decision makers in a company will often choose to utilise their existing talent to fill the needs of a changed market or some necessary redundancies that may have been made for performance or budget reasons. That being said, not every employer gets it right when it comes to making these changes, especially with regard to the rights of their staff.

The main case I want to look at is from 2010 as it was quite the landmark decision on this subject. The matter of Whittaker v Unisys Australia Pty Ltd[1] was heard in the Victorian Supreme Court. In this particular example the employer decided to change aspects of the worker’s job and the employee objected. It turned out that according to the court that Unisys had actually dismissed the worker in the eyes of the law.

Mr Whittaker had been an employee of Unisys in the position of Vice President and General Manager. Due to a restructure the company decided to shift him in to a new position that focused on negotiating and closing larger scale deals. Mr Whittaker found that his salary and status were unchanged along with his reporting lines. However the new position removed several functions from his role that were essential for progression within the company. Mr Whittaker objected to this new restructured position and refused to accept it.

When the case went before the Victorian Supreme Court, it was found that this new position was a substantial reduction in status and responsibility in comparison to his former role. The court did recognise that “from time to time, employees may be required to perform other duties that are within the limits of their skill base, competence and training”[2], but that this did not equal a permanent assignment to a new position. Mr Whittaker’s claim was successful, and the decision is a reminder to employers to take care not to actually demote a worker when altering duties or restructuring a role. The Supreme Court awarded Mr Whittaker six months’ salary in lieu of notice as a result of the repudiation of his employment contract by Unisys. Mr Whittaker had additionally claimed for a redundancy payout equal to two weeks pay per year of service however this was denied by the court.

This case turned out to be quite the landmark decision and the principles set down by this decision were used later again in 2010 in the case of Earney v Australian Property Investment Strategic Pty Ltd[3]. This example is quite similar to Whittaker’s in that an employee was in a position as Chief Financial Officer.  After an acquisition of his company by another, Mr Earney’s status and responsibility were downgraded, which amounted to a constructive dismissal. I want to outline the legal principles that Justice Hargrave adopted from the Unisys matter above for use in his decision. These are:

  • Repudiation is the actions of a party which demonstrates intent to no longer be bound by a contract or to only fulfil it in a manner that is inconsistent with the party’s obligations.
  • Whether there has been repudiation is an objective test and is a question of fact. It cannot be lightly inferred.
  • Repudiation must be demonstrated by a single act or by the overall accumulation of conduct.
  • The aggrieved party must choose to accept the repudiation which brings about the end of the contract.
  • Repudiation may be remedied by the party in breach but only before acceptance of the aggrieved party.
  • A substantial reduction in pay, status or responsibility may form a repudiation but is a question of fact. These reductions may occur in status or responsibility even where the worker keeps the same pay and title.
  • A considerable change in the nature of a worker’s responsibilities may not give rise to a repudiation in some situations. While the employer cannot force changes of status and responsibilities on a worker, the circumstances may allow for a degree of flexibility where both worker and employer must provide some reasonable give and take. Ergo repudiation may not be inferred in the absence of serious non-consensual intrusions on the worker’s status and responsibilities.

The lessons that should be taken away from these two examples is that an employer needs to be wary when deciding to reduce a worker’s status and responsibilities – even when maintaining salary and reporting lines. This is particularly the case where a reduction or change becomes substantial over time. For a worker it is important to be aware of your rights and what you do and do not need to accept. Having said that there does need to be a certain amount of give and take by the worker – this means that you simply cannot hold fast and refuse to accept changes. Rather change should be discussed and if necessary negotiations entered in to. The employer needs to gain their worker’s consent before putting changes to a position in to effect. On the flipside, a worker simply can’t refuse what could be construed as a fair and reasonable request, but rather be open to engage in a dialogue with their employer so that a fair and equitable solution can be reached. If this breaks down and the employer refuses to be reasonable, you have the option to seek redress before the courts. Just be wary that in every case it has taken well over 12 months for a matter to be heard and a decision handed down.

[1] [2010] VSC 9
[2] [2010] VSC 9 at 19
[3] [2010] VSC 621

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