s.170CE application for relief in respect of termination of employment

[1] In this matter the applicant, Ms Gorczyca, has lodged an application under section 170CE(1). The respondent has moved for dismissal of the application on the ground that the application is outside the jurisdiction of the Commission because there has been no termination of the applicant's employment. The matter concerns the application of section 170CD(1B), a provision inserted into the Workplace Relations Act 1996 in August 2001 by the Workplace Relations Amendment (Termination of Employment) Act 2000. The applicant was represented by Mr Pauline of counsel, and the respondent by Ms Pugsley of the Australian Higher Education Industrial Association (AHEIA).

"1B 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 effected the demotion."

[3] The applicant was first employed by RMIT as a "tutor/demonstrator" on 11 February 1982. The appointment was described as being on a "full-time limited term basis" to terminate on 21 December 1984. The appointment was said to be:

"subject to the terms and conditions of employment governing staff of the Institute which are determined by Council from time to time and promulgated in RMIT Operating Procedures (Staffing)".

[4] On 15 March 1983 the applicant was appointed as a "Lecturer in Food Science" on a "full-time limited tenure basis" to terminate on 20 December 1985. Again, the appointment was said to be subject to the same terms and conditions.

[5] On 17 December 1985 the applicant was appointed to a term as a lecturer from 1 February 1986 until 23 December 1988. The appointment was "subject to the terms and conditions of employment governing staff of the Institute which are determined by Council from time to time".

[6] On 22 September 1987 the applicant was appointed as a Lecturer 1, Level 4 subject to the same terms and conditions plus the additional condition that she complete 24 months satisfactory service before being confirmed as permanent. This occurred on 4 October 1989.

[7] On 27 May 1991 the applicant was appointed as a Senior Lecturer 2, Level 1 effective from 4 February 1991 to 31 December 1991 when she was to revert to her substantive position.

"The terms and conditions of employment will be in accordance with the relevant awards and determinations covering Academic Staff of the Institute and the policies determined by RMIT Council from time to time."

[8] On 6 November 1991 the applicant was promoted to Senior Lecturer, and on 21 June 1996 she was promoted to Associate Professor.

[9] The Universities and Post Compulsory Academic Conditions Award 1995 [U0107 [M6477]] (the 1995 Award) was issued by the Commission on 14 December 1995. It replaced the Australian Post Compulsory and Higher Education Academic Staff Conditions of Employment Award 1988 [A466 [H0551]] (the 1988 Award) to which RMIT was a named respondent. That award in clause 7 - Procedures for dealing with unsatisfactory performance, established certain procedures whereby an employee could, amongst other things, be demoted for unsatisfactory performance and in clause 8 - Procedures in respect of serious misconduct, provided procedures whereby an employee could (amongst other things) be demoted for serious misconduct.

[10] The 1995 Award is described in clause 3 - Application, as being binding according to its terms upon:

(i) the National Tertiary Education Industry Union (NTEU);

(ii) the institutions listed in Schedule 1 (of which RMIT is one); and

[11] Clause 5(c) of the Award defined "disciplinary action" which may be taken for "unsatisfactory performance, misconduct or serious misconduct" including

"(ii) demotion by one or more classification levels or increments".

[12] Clause 9 - Termination of employment and disciplinary action, sets out the process which must be followed in order to discipline or terminate the employment of an academic.

[13] The Royal Melbourne Institute of Technology, Academic and General Staff (PACCT) Enterprise Agreement 1997 [R0699 Cas M Doc P7085] (the 1997 Agreement) was certified by the Commission on 1 December 1997 with a nominal expiry date of 1 July 1999. By virtue of section 170LX it remained in force until 10 January 2001 when it was replaced by the Royal Melbourne Institute of Technology Academic and General (PACCT) Staff Enterprise Agreement 2000 [AG804836] (the 2000 Agreement).

[14] The 1997 Agreement stated in clause 5 - Parties bound and application, that it was:

"binding according to its terms on (amongst others) all Academic and General (PACCT) employees employed by the Royal Melbourne Institute of Technology".

[15] In clause 6(a) the Agreement stated that it should be:

"made and interpreted wholly in conjunction with the awards:

Universities and Post Compulsory Academic Conditions Award 1995

"The parties agree that except as varied by this certified agreement, all other provisions of the awards pertaining to RMIT staff listed in clause 6(a), as at the date of certification of this Agreement, shall continue to operate during the life of this Enterprise Agreement".

[17] The Agreement makes no reference to disciplinary proceedings in relation to academic staff.

[18] The 2000 Agreement, certified on 10 January 2001 has a nominal expiry date of 30 June 2003. In clause 6 - Parties bound and application, it is expressed as being binding upon (amongst others):

"all Academic and General (PACCT) employees employed by the Royal Melbourne Institute of Technology".

[19] Clause 7 - Relationship to awards and certified agreements, states:

"This Agreement supersedes and replaces in its entirety any previous certified agreements covering employment with the University".

This Agreement operates to the exclusion of and wholly replaces any award of the Australian Industrial Relations Commission and any industrial agreement which may otherwise, but for this clause, apply to those staff whose employment falls within the scope of this Agreement. In particular, this Agreement displaces the following Awards and Agreements as varied from time to time.

Universities and Post Compulsory Academic Conditions Award 1999

[20] Schedule 2 - Academic employees only, of the 2000 Agreement deals with Termination of employment and disciplinary action. At clause 3 - Disciplinary procedures, it defines "disciplinary action" in the same terms as the 1995 Award. It further requires (clause 3(b)(ix)) that disciplinary action may only be taken by the Vice-Chancellor.

[21] On 4 August 1999 the Universities and Post Compulsory Academic Conditions Award 1995 [U0107 [M6477]] was replaced in its entirety by the Universities and Post Compulsory Academic Conditions Award 1999 (the 1999 Award). The award is binding on the same parties as the 1995 Award. The 1999 Award contains no provision in relation to disciplinary procedure.

[22] On 20 November 2000 the applicant was notified of certain "allegations of misconduct/serious misconduct" which required "further investigation pursuant to the Universities and Post Compulsory Academic Conditions Award 1995". The final outcome of those investigations was the letter of 21 December 2001 in which the Vice-Chancellor notified the applicant of her demotion.

[23] On 5 March 2002 the applicant lodged an application under section 170CE(1) of the Workplace Relations Act 1996 in which she claimed that her employment was terminated by the letter of 21 December 2001, received by her in February 2002. It is not disputed that she continues to work for RMIT and, that as a result of the Vice-Chancellor's decision, she has suffered a loss in remuneration of approximately $20,000 per annum. There was a dispute between the parties as to the significance of any change in duties as a result of the demotion.

[24] Written submissions and supplementary submissions were received from both parties.

[25] The respondent submitted that the amendment to the Workplace Relations Act 1996 by the insertion of section 170CD(1B) did not operate to alter the reasoning of the Commission in Hermann v Qantas Airways Ltd [PR903096] and Boo Hwa Chan v Christmas Island Administration [Print S1443]. These cases stand for the proposition that a demotion which might otherwise amount to a termination of the employment will not do so:

(a) if the employee's contract contains an express term allowing demotion; or

(b) where an award gives an employer the option of redeployment (or demotion) as an alternative to termination of employment.

[26] The applicant is a member of the National Tertiary Education Industry Union (NTEIU) and, therefore, the 1995 Award applies to her employment pursuant to section 149(1)(f) of the Workplace Relations Act 1996 (see also Re NTEIU and another; ex parte Quickenden (1996) 140 ALR at 388 per Toohey J).

[27] Further, the 1997 Agreement expressly incorporates the 1995 Award and by virtue of clause 5 - Parties bound and application, that Agreement applies to all Academic and General (PACCT) employees of RMIT. The binding effect of the 1997 Agreement derives from statute not contract. It is not necessary for the right to demote to be contractual in order for the employer to exercise that right.

[28] The applicant was an academic staff member of RMIT at the time of the certification of the 1997 Agreement and, accordingly, it applied to her employment (CSR Limited Officers Association and CSR Ltd [Print Q1122]). The 2000 Agreement, at clause 3 - Disciplinary procedures, of Schedule 2 - Academic employees only, contains similar provisions with regard to disciplinary action for misconduct as the 1995 Award.

[29] The 1995 Award operates to override the common law in relation to the applicant's demotion. In Byrne v Australian Airlines Ltd (1995) 85 CLR 410 the Court held that unless an award provision is expressly incorporated it cannot have a "further and distinct operation as a contractual term" or confer "private rights enforceable by way of an action for damages". Operation as a contractual term extends the operation of awards to give rise to a separate action in common law in the event of a breach. However, it is not necessary that an award term be also a contractual term for that term to be of effect.

[30] In the alternative, the respondent submitted that the 1991 letter of appointment acted to expressly incorporate the 1995 Award into the applicant's contract of employment. The respondent concedes that there is no express reference to the 1995 Award in the letters of appointment but the reference to "the relevant awards and determinations" is arguably sufficient. It can be said that the applicant accepted its terms by her performance.

[31] Further, the applicant did not return to her substantive position after 31 December 1991 as she had already been promoted to the position of Senior Lecturer and was later promoted to Associate Professor. The only changes to the applicant's position after 1991 were to her title and salary. Her duties remained substantially unchanged. There was no profound change in duties which would amount to a new contract rather than a variation to her existing one (Quinn v Jack Chia [1992] VicRp 37; (1992) VR 567).

[32] If the applicant is of the view that the Vice Chancellor's decision to demote her was an error of law (as appears from her correspondence) the applicant's remedy lies in an application pursuant to section 178 of Workplace Relations Act 1996.

[33] The applicant submits that the ordinary meaning of section 170CD(1B) is that only demotions which might be described as minor, in that they do not involve a significant reduction in remuneration or duties, where the employee remains in the employment, are excluded from being terminations for the purposes of Division 3. The wording of the section does not refer to demotions that involve significant reduction of remuneration or duties but are not terminations of the contract at common law. Parliament did not, therefore, intend to exclude these kinds of demotions (see Thompson v Goold and Co [1910] AC 409; Marshall v Watson [1972] HCA 27; (1972) 124 CLR 640).

[34] The Explanatory Memorandum to the Bill does not assist in determining the purpose of the amendment to the definition of termination. The Second Reading Speech states, however, that the new section 170CB(1B) is "aimed at ensuring certainty in jurisdiction" (Hansard, 26 June 2000, page 18326).

[35] It is reasonable to interpret section 170CB(1B) as being exhaustive of the types of demotion that are excluded from being a termination.

[36] In the alternative, the applicant submitted that the combined effect of the significant reduction in salary and the change of duties amounted to a termination of the applicant's contract of employment on the basis of Advertiser Newspapers Pty Ltd v IRC of SA and Grivell (1999) SASC 300, and Quinn v Jack Chia.

[37] Hermann's case excludes from the Commission's jurisdiction, in addition to any demotions excluded by section 170CD(1B), demotions where there is an express term of the employment contract allowing demotion. However, in this case the demotion provisions contained in the 1995 Award or the 2000 Agreement are not express terms of the applicant's employment contract and are not expressly incorporated into the contract of employment.

[38] The effect of the respondent's interpretation would be a return to the position in Brackenridge v Toyota Motor Corporation Australia Ltd [1996] IRCA 628; (1996-1997) 142 ALR 99 where the Court required that the termination be a termination of the employment relationship. This is inconsistent with the view that under the Workplace Relations Act 1996 there need only be a termination of the employment contract.

[39] The interpretation advanced by the respondent would effectively allow an employer to effect a harsh, unjust or unreasonable termination of the contract of employment under the guise of a demotion. This would leave the employee with no alternative but to accept it or leave and pursue a section 170CE claim on the basis of a constructive dismissal.

[40] The respondent has conceded that there is no express reference to the 1995 Award in the chain of correspondence (letters of appointment) between the respondent and the applicant. The ambiguity in the general words used in the 1991 letter are not enough to support an argument that that would be sufficient to incorporate the terms of the 1995 award into the contract. Even if this were the case (which is not conceded) any contract of employment as Senior Lecturer was replaced with a contract as Associate Professor in 1996 (see Quinn v Jack Chia).

[41] The existence of the demotion provisions in the 2000 Agreement cannot go to whether there has been a termination of the contract of employment. The existence of the right to demote under the 2000 Agreement can only be used as a shield in defending whether the demotion is harsh, unjust or unreasonable, not as a sword to prevent an employee having access to the Commission's jurisdiction.

[42] Ryan v Furney's Stockfeeds Ltd (1996) 66 IR 298 cannot be interpreted as supporting an argument that the demotion provisions of the 1995 Award or 2000 Agreement need not be expressly incorporated into an employee's employment contract. The decision in Ryan v Furney's Stockfeeds Ltd dealt with the interpretation of provisions of the regulations some of which contained reference to a "contract of employment" and others which did not. It was open on the wording to conclude that the probationary period could also stem from the award. In this case, there is no statutory provision dealing with demotion. The only exclusionary criteria is the principle in Hermann's case that an express term in the contract of employment allowing demotion excludes the demotion from the Commission's jurisdiction.

[43] To extend the exclusion to include demotions allowable by an agreement or an award would be to elevate the terms of an award or certified agreement to the status of contractual terms. This would be contrary to the principles in Byrne v Australian Airlines Ltd.

[44] Boo Hwa Chan cannot be interpreted as authority for the proposition that a provision of an award (or certified agreement) giving a right to an employer to redeploy an employee means there is no termination of the employee's contract of employment. Polites SDP refers to the employment contract being governed by the relevant awards. His conclusions (in paragraph [19]) can only be correct if the award was expressly incorporated into the contract of employment, in which case, the references to the "operation of the award" should really be read as references to the terms of the contract, which incorporated the provisions of the award. Alternatively, Polites SDP misdirected himself and the decision should not be followed.

[45] Both awards and certified agreements get their binding effect from statute, and not from contract, unless the parties have expressly incorporated the relevant instrument into the contract (Peel v PMP Print Pty Ltd [PR907818]).

[46] A certified agreement is tantamount to an award in relation to whether it is incorporated into an individual contract of employment. A right to demote contained in a provision in a certified agreement is not a contractual right to demote. A right in a certified agreement allowing the employer to do so means that the employer will not be liable in an action for breach of a certified agreement under section 178 of the Workplace Relations Act 1996. However, such a demotion will still be a termination of the employment contract unless the right to demote has been expressly incorporated into the contract.

[47] Section 170CD(1B) is a provision recently inserted into the Workplace Relations Act 1996. The purpose of its insertion, as explained in the Second Reading Speech was "aimed at ensuring certainty to jurisdiction", an aim which, on the basis of the submissions before me, it may not have achieved.

[48] Section 170CD(1) defines "termination" or "termination of employment" as:

"termination of employment at the initiative of the employer".

[49] Section 170CD(1B) goes on to say that for the purposes of this division, "termination" or "termination of employment" does not include demotion in employment if two particular circumstances both apply.

[50] Mr Pauline argued that section 170CD(1B) represented a "complete code" in dealing with whether a demotion could be a termination of employment. Only if the demotion did not include a significant reduction in the remuneration or duties of the demoted employee, and the employee remained in the employ of the employer, would it fail to meet the test of being a termination of employment. In all other cases the demotion would be a termination of employment at the initiative of the employer.

[52] Take, for example, a statute dealing with duck shooting. The statute defines a "duck" as a bird which can swim, fly and quack. It further states that for the purpose of defining a duck, a duckling is not included. It does not, therefore, follow that a bird which looks like a duck is not a duckling and can fly and swim is a duck. It must be able to quack.

[53] To meet the criteria of being a "termination" or "termination of employment" the demotion, in my view, must still meet the definition of being a "termination at the initiative of the employer". On Mr Pauline's interpretation of the section, a demotion which did not involve a significant reduction in remuneration or duties but where the employee elected to leave the employment, for example, would automatically be a termination of employment for the purposes of Division 3.

[54] The issue of whether the employee's decision to leave amounted to "termination at the initiative of the employer" would not be considered.

[55] In the alternative, Mr Pauline submitted that as there was no express provision in the applicant's contract giving the employer a right to demote her, and as it was conceded that she suffered a significant reduction in remuneration, the demotion was at common law a termination of the applicant's contract and was, therefore a termination of employment within the meaning of Division 3.

[56] There are no express terms in any of the letters produced by the respondent dealing with the capacity of the respondent to demote the applicant. The earlier letters refer to her appointment being "subject to the terms and conditions of employment governing staff of the Institute determined by the Council from time to time". There was no evidence that the Council had at any time determined any conditions in relation to demotion of employees.

[57] The letter of 27 May 1991 confirming the applicant's appointment for a specified period to the position of Senior Lecturer 2 did specify that:

"the terms and conditions of employment will be in accordance with the relevant awards and determinations covering Academic staff of the Institute and the policies determined by RMIT Council from time to time" (my emphasis).

[58] There was, in evidence, a copy of the 1988 award previously referred to which did contain an express capacity in the Chief Executive Officer to demote an employee for unsatisfactory performance or serious misconduct. This award was, in turn, replaced by the 1995 Award which included the express capacity for the Chief Executive Officer to "demote by one or more classification levels or increments" a member of academic staff for "unsatisfactory performance, misconduct or serious misconduct". That award was, in turn, replaced in its entirety by the 1999 Award on 4 August 1999. The 1999 Award contains no provisions in relation to the capacity of a Chief Executive Officer to demote an employee.

[59] The 1997 Agreement by virtue of clause 18(a) kept alive, so to speak, the provisions of the award as at the date of certification and continued in force until January 2001, when it was, in turn, replaced by the 2000 Agreement which made specific provision for demotion of employees. It is, however, arguable that even if the terms of relevant awards were incorporated into the applicant's contract by virtue of the May 1991 letter there was, at the material time, no "relevant award" which incorporated into the applicant's contract of employment a right in the Chief Executive Officer to demote her.

[60] It may reasonably be inferred that the meaning of the letter of 27 May 1991 was that the terms and conditions of employment applying to the applicant's employment were to be found in the "relevant awards and determinations" and the policies determined by RMIT Council from time to time. It is not necessary that such terms be expressly stated nor that they be incapable of variation (Riverwood International Aust Pty Ltd v McCormick (2000) FCA 889).

[61] The reference in the letter, however, is to "relevant awards and determinations" and not to any other industrial instrument. A certified agreement is not an award for the purposes of the Workplace Relations Act 1996 (section 143(A)). While it may be arguable that the 1997 Agreement continued to make the 1995 Award a "relevant award", the provisions of the 2000 Agreement clearly excluded the operation of any award which might otherwise apply. At the time of the decision to demote the applicant, December 2001, there was no "relevant award" which allowed such an action.

The operation of the 1995 Award and/or 2000 Agreement

[62] Mr Pauline relied on the decision in Byrne v Australian Airlines to submit that, as the award or agreement could not be an implied term of the applicant's contract of employment, it was not relevant to determining whether or not there was a "termination of employment" that the award or agreement expressly provided for demotion of an employee in certain circumstances.

[63] Byrne v Australian Airlines involved proceedings in the Federal Court where the employees concerned sought relief for a breach of an award and also sought damages for breach of contract and breach of statutory duty. They based the claim for breach of contract on a contention that the terms of the award were, amongst other things, an implied term of the contract of employment. The High Court found that they were not. The Court was not dealing with a remedy for termination of employment created by statute or the possible relationship between the capacity to access such a remedy and the terms of the award or agreement given the force of law by the same statute.

[64] Ms Pugsley relied on the decision of Polites SDP in Boo Hwa Chan to submit that where an award or agreement gave the employer the option of demoting an employee, then the employment was not terminated, notwithstanding the common law position.

[65] In that case, the applicant was redeployed by the respondent in accordance with the provisions of the Christmas Island Redundancy Award 1981 [Print K4253]. His Honour found (at paragraph [19]):

"The award . . . appears to me to give the Administration a clear option to redeploy and if such an option is exercised by virtue of the operation of the award the employment is not terminated notwithstanding the common law position . . .

Put another way I conclude that because of the award provisions whatever may be the effect of the notice at common law on either the employment contract or the employment, had the employer exercised the rights of redeployment under the award there would for purposes of the Act be no termination by virtue of the operation of the award. See Amalgamated Collieries of WA Ltd v True [1938] HCA 19; (1937-38) 59 CLR 417 particularly Latham CJ at 423.

[66] Mr Pauline sought to distinguish Boo Hwa Chan on the basis that in paragraph [2] of the decision His Honour stated:

"The employment contract was governed by (a) the Christmas Island Administration Award 1993 [Print L1386] and (b) the Christmas Island Redundancy Award 1981 [Print K4253]".

[67] These awards must have, therefore, been incorporated into the applicant's contract of employment by some express provision.

[68] There was no express finding by SDP Polites that the terms of the award were expressly incorporated into the applicant's contract. The reference to Amalgamated Collieries of WA Ltd v True and, specifically, to the decision of Latham CJ at page 423 might suggest that such a finding was not necessary. Latham CJ found:

"When any person is employed to do work to which an award applies, the parties are bound by a contract. Their legal relations are in part determined by the contract and in part by the award. The award governs their relations as to all matters with which it deals".

[69] The relevance of award provisions to the jurisdiction of the Commission in exercising its powers in relation to termination of employment was also dealt with by Beazley J in Ryan v Furneys Stockfeeds Limited (1996) 66 IR 298. The issue in that case was the application of Regulation 30B(1)(c) to circumstances where there was in operation an award, which specified that all weekly employees were employed under a probationary period of three months commencing from the date of engagement.

[70] Her Honour found that at the time the contract of employment was made nothing was said to the applicant about the employment being subject to a trial period. Her Honour nevertheless found that under the provisions of the award, the applicant's period of probation was fixed in advance, thus satisfying subparagraph (i) of Regulation 30B(1)(c).

[71] Her Honour relied on the following in support of her finding:

"In Byrne v Australian Airlines (1995) 61 IR 32, the High Court upheld the finding of the Full Court of the Federal Court that the terms of an award are not implied into a contract of employment. That does not mean, however, that an award has no operation. Brennan CJ, Dawson and Toohey JJ, in explaining the operation of an award provision, stated (at 35-36):

"The award regulates what would otherwise be governed by the contract. But [the award provision is] imported as a statutory right . . . The importation of the statutory right into the employment relationship does not change the character of the right. Latham CJ points out in his judgement in Amalgamated Collieries of WA Ltd v True [1938] HCA 19; (1938) 59 CLR 417 at 423, the legal relations between the parties are in that situation determined in part by the contract and in part by the award.

In a system of industrial regulation where some, but not all, of the incidents of an employment relationship are determined by the award, it is plainly unnecessary that the contract of employment should provide for those matters already covered by the award. The contract may provide additional benefits, but cannot derogate from the terms and conditions imposed by the award (see Kilminster v Sun Newspapers Ltd [1931] HCA 37; (1931) 46 CLR 284) and, as we have said, the award operates with statutory force to secure those terms and conditions. Neither from the point of view of the employer not the employee is there any need to convert those statutory rights and obligations to contractual rights and obligations."

[72] Mr Pauline sought to distinguish Ryan's case on the basis that the relevant regulation referred to in subparagraphs 1(a) and (b) referred to an employee "engaged under a contract of employment" where as subparagraphs (c) and (d) refer to "an employee serving a period of probation" and "a casual employee". It was, therefore, clear that subparagraph 1(c) did not require the probation to be a term of the contract of employment. It was open to conclude that the probationary period could also stem from the award.

[73] Ms Pugsley submitted that Ryan simply restated the position in Byrne that:

"In a system of industrial regulation where some, but not all, of the incidents of the employment relationship are determined by an award, it is plainly unnecessary that the contract of employment should provide for those matters already covered by the award".

[74] It is not necessary that an award term be also a contractual term for that term to be of effect. As Beazley J noted:

"Division 3 of Part VIA of the Act is not confined to cases which are only governed by a contract of employment. It equally applies where an award also operates in respect of the employment".

[75] The application in this matter has been lodged on the basis that the termination of employment was harsh, unjust or unreasonable. With the exception of the provisions of section 492, an application on such grounds can only be made by an employee who meets the criteria set out in section 170CB(1). The relationship between the jurisdiction of the Commission under Division 3 of Part VIA and the coverage of employees by awards, certified agreements or Australian Workplace Agreements (AWAs) made under the provisions of the Act is expressly recognised.

[76] It seems to me to be untenable that a statutory right provided by one part of the Act can be found to override a statutory right created by another, unless it is expressly stated to do so. If an award or certified agreement can provide an employer with the right to demote an employee as an alternative to terminating his or her employment, it appears inconsistent with such a right that its exercise is, nevertheless, a termination of the employment at the initiative of the employer for the purposes of Division 3 of Part VIA.

[77] Moreover, the relevant industrial instrument in force at the time of the demotion was the Royal Melbourne Institute of Technology Academic and General (PACCT) Staff Enterprise Agreement 2000 [AG804836] (the 2000 Agreement). This is an agreement made pursuant to section 170LJ of the Workplace Relations Act 1996 which, according to its terms, applies to all academic and general (PACCT) employees employed by RMIT.

[78] Section 170LJ appears in Division 2 of Part VIB of the Act which deals specifically with agreements made between corporations and organisations of employees or employees (Section 170LH). The provisions of Division 2 of Part VIB also purport to bind by such agreements, all persons whose employment is, at the time when the agreement is in operation, subject to the agreement. By virtue of the statute, such agreements create rights and liabilities between the constitutional corporations which make the agreements, the organisations of employees with whom they conclude agreements and the employees to whom the agreements apply (see Quickenden v Commissioner O'Connor (2001) FCA 303, per Black CJ and French J at paragraph [40]).

[79] In Quickenden v O'Connor, Dr Quickenden challenged the validity of the certification of such an agreement and the provisions of the Act under which it was certified. In dealing with the impact of the agreement on Dr Quickenden's contract of employment, Black CJ and French J in a joint judgement found (at paragraph [69]):

"The broad brush complaint that common law contractual rights were displaced by the certified agreement faces another threshold issue. For while the agreement bound Dr Quickenden by force of law, it did not thereby terminate his contract of employment. It created rights and obligations which were statutory in character and could operate in addition to the rights and obligations under his contract and, where inconsistent, no doubt displace them" (my emphasis).

[80] In a separate judgement Carr J found (at paragraph [131]):

". . . an award imposes certain statutory terms and conditions which do not necessarily displace underlying common law contractual relations. If they conflict, the award or certified agreement may modify the contractual provisions, but otherwise they continue to co-exist" (my emphasis),

"The challenged provisions are part of a scheme which provides for negotiation (usually involving an exchange of concessions) followed by a ballot decided by a majority of those who vote. The whole essence of that process is the adjustment of competing rights" (my emphasis).

[81] If the contract makes no express provision for the demotion of the applicant this does not prevent the certified agreement which is binding on the applicant from doing so. The certified agreement may regulate what might otherwise be governed by the contract.

[82] An application under section 170CE(1) is not a suit for damages for breach of contract. The absence of a provision in a contract enabling an employer to demote an employee may provide the basis, at common law, for such an action to be taken. In this case, however, the remedy the applicant is seeking is a remedy from the Commission.

[83] What we are dealing with in these proceedings are rights founded not in contract but created by statute. The employer has exercised a right, created by the certified agreement which is binding on the applicant, to demote her. That right is given the force of law by virtue of Division 2 of Part VIB of the Workplace Relations Act 1996.

[84] In my view, the operation of that Agreement serves to modify any right the applicant may have, based on common law, to claim that her demotion was a termination of employment giving rise to a right to seek a remedy under the provisions of Division 3 of Part VIA of the same Act.

[85] For these reasons, the application is dismissed for want of jurisdiction.

C. Pugsley of the Australian Higher Education Industrial Association with R. Vidmar and P. Branov for RMIT University.

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