[2] Evidence was given by Mr Cuddy - Payroll Officer, Mr Bandiera - Client Services Manager, and Mr Lovemore - Operations Manager for Chubb Security Australia Pty Ltd. The applicant gave evidence and Mr Higgins, a security officer also gave evidence on his behalf.

[3] Witness statements were tendered in the proceedings which went beyond the matters which were the subject of the motion to dismiss. The parties only sought to rely on those matters in the statements which went to the jurisdictional issue and cross-examination was also confined to those matters.

[4] Mr Blair commenced employment as a security guard with a company, MSS, in 1991. In 1996 that company was purchased by the respondent. From early in 1997 Mr Blair was employed at the Cryovac site and in August 2001 was promoted to site supervisor.

[5] As site supervisor Mr Blair was paid an annual salary with four weeks annual leave. He worked 8.5 hours Monday to Friday and was paid overtime if he was required to work on the weekends.

[6] On 27 May 2003 he was called to a meeting with Mr Bandiera and Mr Lovemore. The events of that meeting were not relevant to these proceedings save that at the end of that meeting Mr Blair was told that he was to be removed from the Cryovac site. He was given some annual leave and was told that he would continue to be paid at his current rate while on leave.

[7] There was a dispute between the parties as to what else was said concerning Mr Blair's future. Mr Blair's evidence was that it was stated by Mr Lovemore that when he returned to work he would be waiting assignment as a security officer on a lower rate of pay. Both Mr Bandiera and Mr Lovemore denied that there was any reference to a reduction in status or pay. Mr Blair was simply told he would be "awaiting assignment". Mr Bandiera's notes of the meeting make no reference to a reduction in pay.

[8] Following the meeting, on 5 June 2003, a letter was sent to Mr Blair by Mr Bandiera. The letter refers to what occurred at the 27 May meeting. The letter refers to Mr Blair being placed on "awaiting assignment" until further notice. It makes no reference to the applicant's status or rate of pay.

[9] Mr Blair had sought legal advice concerning his position and on 5 June 2003 his solicitor wrote to the respondent. The letter states in part:

"We believe that although our client's employment has not been terminated, if our client is not placed in another supervisory position having the same benefits that this role afforded or given some monetary compensation to reflect our client's lost wages, then our client will be forced to resign".

[10] On 10 June 2003 the company received a medical certificate stating that the applicant would be unfit for work from 8 June 2003 to 15 June 2003. Similar certificates have continued to be received by the company.

[11] For the pay period ending 15 June 2003 until the period ending 27 July 2003 Mr Blair was paid at a rate considerably less than he had been receiving as a site supervisor.

[12] The evidence of the company was that this had been a payroll error and that it was rectified once it had been discovered by Mr Bandiera.

[13] On 23 June 2003 the company wrote to Mr Blair advising him that he was being rotated to the George Weston Foods site at Altona. The letter advised:

"You will retain your position as senior supervisor and will be paid $39,085.00 gross per annum which is the same pay as the previous incumbent received."

[14] Mr Blair was also advised that he would be required to work a 48 hour week roster.

[15] On 4 July 2003 Mr Blair lodged this application.

[16] Mr Cuddy gave evidence about the applicant's remuneration and that of the previous incumbent at the George Weston site. Mr Cuce had been paid an hourly rate as a Security Officer - Level 4 under the award. He received a daily loading for overtime as well as a leading hand allowance and first aid allowance. Mr Cuddy stated that the remuneration paid to supervisors was determined by the company. It did not depend on the level of security officers they supervised or the category assigned to the site. His evidence indicated that on an annualised basis the gross per annum for both positions was much the same.

[17] Mr Bandiera's evidence was that the supervisor's role was extremely similar on both sites. Both sites were 24 hour, seven day operations. At Cryovac there were four guards plus the supervisor and at George Weston there were three. There was a difference in hours because of the different rosters.

[18] He agreed that the site specific duties were different on the two sites. There was a computer in the guard house at George Weston but it was not an integrated building and security system.

[19] Mr Lovemore gave evidence as to the duties of a supervisor. He stated that a supervisor's remuneration varied depending on the particular site. There are a lot of different requirements. The supervisor's rate was not determined in the same way as a security officer's was. He gave some evidence about how the uniforms of officers, supervisors and inspectors were also distinguished.

[20] Mr Blair gave evidence of what happened to his pay after the beginning of June 2003. He stated that he had not contacted the company at the time as he had expected his pay to drop. He gave evidence of what duties he performed at Cryovac and of what he had observed a security officer to be doing when he had gone to the George Weston site and observed it for twenty minutes from his car.

[21] He stated that he had considered the position at George Weston to be deskilling. He admitted that he had not spoken to the company or made any contact to enquire about the duties and responsibilities of the George Weston position.

[22] Mr Higgins is a guard at Cryovac. He had not worked at the George Weston site or visited it. He recounted a conversation he had had with the supervisor from George Weston who is now at Cryovac. He gave evidence of Mr Blair's role as site supervisor at Cryovac.

[23] The applicant submitted that the transfer to the George Weston site amounted to a demotion and a termination of the applicant's contract of employment. The demotion was a unilateral action by the respondent and was not agreed to by the applicant.

[24] There was a significant diminution in the applicant's remuneration and duties and responsibilities. The payslips and calculations done by the applicant support this. The pay that the incumbent was receiving at George Weston was different to what Mr Blair was receiving at Cryovac. The hours were significantly longer. That is a relevant matter for consideration. It cannot be said that there is no significant reduction in remuneration where there is a significant increase in hours.

[25] The evidence of the duties performed by Mr Blair at Cryovac establish that the move to George Weston would result in a substantial deskilling of Mr Blair. It is not enough to continue to call him a supervisor but then to put him in a position where the skills he has been using on a regular basis are no longer required.

[26] While the company may have some capacity to move people from site to site, where the difference in duties is marked, and this is not accepted by the employee, that falls within the description of a demotion that is capable of being a termination of employment.

[27] The respondent submitted that the applicant had not been demoted as defined by the Workplace Relations Act 1996. He was removed from the site where he was working and placed on "awaiting assignment". Any reduction in his pay was an error which was adjusted as soon as it came to the attention of Mr Bandiera and Mr Lovemore. The intention of the company was that he should be paid his supervisor's rate.

[28] The applicant was then assigned to another site. It is not uncommon for Chubb employees to be rotated from one site to another. Mr Blair would still be a supervisor. The rate of pay was virtually the same. Mr Blair did not try to inform himself about the duties and responsibilities of the position.

[29] The duties of site supervisors are common. They look after guards. They look after the site. They deal with rostering issues. They liase with the client. The fact that the applicant may have had more or less to do at Cryovac is not the issue. It is the level of seniority which is important. It is not like the applicant is no longer a supervisor with a supervisor's responsibilities. There is no evidence to suggest any deskilling.

"For the purposes of this Division, termination or termination of employment does not include demotion in employment if:

(a) the demotion does not involve a significant reduction in the remuneration or duties of the demoted employee; and

(b) the demoted employee remains employed with the employer who affected the demotion" (emphasis added).

[31] Neither party made submissions on how the Commission should approach the application of section 170CD(1B).

[32] The capacity of an employee to institute proceedings under section 170CE(1) is conditional upon the termination of their employment, defined by section 170CD(1) as termination at the initiative of the employer.

[33] Termination of employment at the initiative of the employer may occur in a number of ways. It may occur as the result of the employer giving notice to the employee, or summarily by the employer telling the employee that the employment is at an end. It may also occur because of some action on the part of the employer which leads to a repudiation of the employee's contract of employment.

[34] A demotion may amount to a repudiation of the contract by the employer. It may then constitute a termination of employment at the initiative of the employer. In not all circumstances will a demotion constitute a repudiation of the contract or bring about a termination of employment at the initiative of the employer. The contract may, for example, allow the employer to demote an employee in certain circumstances (Hermann v Qantas Airways Limited [PR903096]).

[35] Even where a demotion would amount to a repudiation of the contract, at common law, it may not be a "termination at the initiative of the employer" for the purposes of the Workplace Relations Act 1996. Where the contract is silent, but an award or other industrial instrument provided for under the Act allows the employer to demote an employee, there will be no termination of employment for the purposes of section 170CE(1) (Gorczyca v RMIT University [PR922414]).

[36] Not all actions by an employer which cause a change in employment of an employee will amount to a demotion.

[37] In Adrema Ltd v Jenkins (1945) KB 446 at 450, Humphreys J put the common law position in the following terms:

"I have great difficulty in coming to the conclusion that an alteration in the work of an employee necessarily, at all events, amounts to a termination of the employment of the employee. I am far from saying that there may not be circumstances which may arise in some cases in which so great an alteration is made in the position of the employee by an order of his employer that it may be said that his position is impossible, that the effect of what is done by the employer is in effect to terminate his employment altogether . . ." (my emphasis).

[38] In Quinn v Jack Chia (Australia) Ltd [1992] VicRp 37; (1992) 1 VR 567, Ashley J considered that the effect of the decision in Adrema was that "a very substantial change in duties could amount to a termination of the employment" (at page 576) (my emphasis). On the facts before him he found:

" . . . (T)he change to the plaintiff's situation in August 1985 was exceptional, far reaching, not within the original contemplation of the parties and not comprehended by the contract initially made between them . . ." (my emphasis).

[39] On that basis his Honour considered that the contract was terminated and a new contract initiated.

[40] The language of section 170CD(1B) refers to a "significant reduction in the remuneration or duties" of the employee. In order for a demotion to bring about the termination of the employment, I am of the view that the reduction in remuneration or duties would need to be significant enough to amount to a repudiation of the contract by the employer.

[41] There is little case law which might provide guidance on this issue. The matter has been considered by state and British tribunals, albeit operating under different legislation.

[42] In 1999 a reduction in salary of $5,000 per annum was considered by the South Australian Industrial Court to be such as to amount to a termination of employment (Woolworths (SA) Pty Ltd v Russian (1999) 66 IR 13). In Britain, a 5% reduction in wages was considered to produce such an outcome (Rigby v Feroda Ltd (1988) 1 CR 29).

[43] The removal from a sales manager of his sales responsibility and, therefore, also of the capacity to earn commission on sales was also found to amount to a termination by the employer (Ford v Milthorn Toleman Ltd (1980) 1 RLR 30).

[44] Where there has been no reduction in remuneration the change in duties necessary to bring about a termination by the employer has been described as "fundamental" (Pedersen v Camden LBC (1981) 1 CR 674 - from bar attendant to catering assistant). Examples include a demotion from fleet car sales director to retail salesman (Wadham Stringer v Brown (1983) 1 RLR 46). Where restructuring resulted in the new position being "a job quite different" from that which the employee had been engaged to do (Beck v Darling Downs Institute (1990) AILR 270) the employee was also found to have been dismissed.

[45] The Industrial Relations Court of Australia also addressed the issue. In Westen v Union des Assurances de Paris, IRCA 419/96, 26 August 1996, Madgwick J adopted a description employed by Macken McCarry and Sappideen of a "serious non-consensual intrusion upon the status or responsibilities, as well as upon the remuneration, attaching to a job" (my emphasis). In that case, His Honour outlined the following changes to the position of Mr Westen which caused him to find that there was "a considerable change in the new position he was being offered" (my emphasis).

"There was no plan to move him from his office. However, in the result, the applicant:

(a) would not be the manager of all claims in NSW, nor, in any real sense, of his own discrete staff;

(b) he would not report directly to the State Manager: his Team Leader, Mr Cummins, would be interposed between them;

(c) he would not have his own personal secretary;

(d) he would not have the power of final decision over claims except by way, no doubt, of delegation in routine matters from his Team Leader:

(d) he would not have the final advisory role to national top-level management in relation to national claims".

[46] Parkinson JR applied similar reasoning in Keast v Mobil Oil Australia (IRCA 245/97, 8 August 1997) finding that:

"There was available and allocated to the applicant meaningful work at a seniority which was consistent with the employment history. This is not a case where the applicant has been transferred or demoted to a position of lesser salary , or in my view, actually less senior, or to a position which involves less meaningful or productive work of a type suitable and conducive to the advancement of his skills or prospects within the business".

[47] She found that there had been no termination by the employer.

[48] A different outcome occurred in Cowell v Irlmond Pty Ltd (1997) 1117 FCA (28 October 1997) where the applicant was being offered a position which had a base salary of $100 per week less and was also being offered alternative employment "other than at a managerial level", Moore J holding that these events caused the termination of the applicant's employment.

[49] While these decisions adopt a more general approach than that prescribed by section 170CD(1B), I am satisfied that they provide guidance in approaching a consideration of whether, in the context of the case before me, there was a significant reduction in either the remuneration or duties of the applicant.

[50] It is clear that the term "remuneration" is a wider one that "wage" and in the circumstances of this case cannot simply be equated with the "hourly rate". The arrangement under which the applicant was paid by the company was an annual rate for ordinary hours of work with additional loadings for annual leave, public holidays and weekend work. The salary included an assumption that his ordinary hours would exceed 38 per week. While his pay slips provide for an "hourly rate" based on 38 hours per week I am satisfied that while this may have been a relevant figure for the calculation of various loadings it was clear to the applicant that he was not entitled, for example, to overtime for all hours worked in excess of 38.

[51] The evidence was that the applicant's total gross earnings for the period 2 June 2002 to 1 June 2003 were $40,120.23. This included an amount of $1,413 by way of additional payments for public holidays, leave loading and weekend overtime. The letter of 23 June 2003 sent to the applicant concerning his rotation to the new site contained the following statement:

"You will retain your position as Senior Supervisor and will be paid $39,085.00 gross per annum which is the same pay as the previous incumbent received".

[52] There was a change in hours in that the position required the applicant to work fixed shifts (day) totalling 48 hours per week.

[53] The evidence before the Commission concerning the previous incumbent was that he had not been paid an annual gross wage but had received an hourly rate with allowances, including the leading hand allowance, and daily overtime. Based on his earnings for the period 29 July 2002 to 25 May 2003, the company estimated that he would have earned $40,516.50 over a full year. The previous supervisor at the George Weston site had been paid as a Security Officer - Level 4, under the award. The leading hand allowance is payable to a security officer, other than a Security Officer - Level 5, who is in charge of between three and ten employees (higher rates apply for ten to twenty employees and twenty plus employees).

[54] The total remuneration being offered to the applicant at either site does not appear to be significantly different. There is an increase in hours per week of 5.5 hours.

[55] The use of the term "remuneration" indicates that consideration should be given to the whole package and not just to the relevant hourly rate. While an increase, or decrease, in the hours worked may have an effect on total remuneration, the increase in hours of work from 42.5 to 48 is not of itself enough to establish a reduction in remuneration.

[56] The company appears to have had its own internal classification system which ran in parallel with the award. The award contains no classification of "supervisor" or "senior supervisor" although it is apparent that at both security officer - level 4 and security officer - level 5 supervisory duties may be involved.

[57] The award provides indicative tasks for security officers. They are clearly not an exhaustive list of functions or duties. Clause 15.6 also requires that a security officer at any level is to perform duties incidental to the tasks of a security officer. Security officers may also be required to perform the duties of a security officer at a lower level.

[58] I accept that the "monitoring and operation of integrated intelligent building management and security systems" is an indicative task for a level 3 security officer. Mr Blair's classification and remuneration, however, is not based on the duties of a security officer or even on the duties of the officers whom he supervises, but on his supervisory role.

[59] Mr Bandiera described the role of a supervisor as management of staff, liaison with the client, maintenance of post orders, training, involvement in staff selection, dealing with day-to-day site issues and advising the client of possible changes. Mr Lovemore described the role as supervision of guards, responsibility for documentation, ensuring that post orders are adhered to, liaison with clients, liaison with the placement officer and dealing with rostering and pay issues for employees under supervision. The level given by the employer to the site - Cryovac was a level 3 site and George Weston a level 1 site - did not determine the rate of pay or duties of the supervisor.

[60] Mr Higgins described the role of the supervisor as to look after security on the site, look after the guards on the site and to liase with the client.

[61] While the company has a system of ascribing levels to sites it is also clear that each site is different and each client has slightly different requirements. There is nothing to suggest that an employee cannot be moved from site to site for a range of reasons. The letter of 23 June 2003 concerning the transfer indicated that the applicant was to retain his designation and the annual gross wage was not significantly different to what he was receiving.

[62] There is no doubt that Mr Blair considered the George Weston site to be inferior to the Cryovac site. It does not appear that the duties of guards at George Weston involved monitoring and operating an integrated building management and security system. The accommodation may not have been as large and the hours were longer. Were the duties however of a significantly reduced level?

[63] I accept that the basic security office duties were ones which could be performed by a security officer - level 1. Mr Blair, however, was not being appointed to be a security officer - level 1 but to be a senior supervisor. The supervisory duties which gave him his rank and remuneration do not appear to be significantly different.

[64] Clearly there are sites which are better than others. Mr Blair considered Cryovac to be a superior site to George Weston and it may well have been more modern and more comfortable. Section 170CD(1B) does not refer to alterations in the hours of work or in the circumstances under which the work is performed. It uses two benchmarks only - remuneration and duties. Unless there has been a significant reduction in one or other of those, where the employee remains in the respondent's employ, there will be no termination of employment at the initiative of the employer.

(a) a reduction in the number of employees supervised;

(b) a reduction in the level of the site from level 3 to level 1; and

(c) a preponderance of duties to be performed by security officers at a level 1 task level.

(a) no reduction in the classification of the position;

(b) no connection between the level of the site and the classification level of the supervisor; and

(c) no change in the supervisory duties involved in the position.

[67] On balance I am not satisfied that based on the criteria contained in section 170CD(1B), there has been a significant reduction in the duties of the applicant or a significant reduction in his remuneration. Further, I am not satisfied that the transfer was not otherwise sanctioned by the terms of the applicant's employment.

[68] Having reached those conclusions I am not satisfied that there has been a termination of the applicant's employment at the initiative of the employer by virtue of his transfer to the George Weston site.

[69] The motion to dismiss is, therefore, granted.

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