Case probes issues involving changing roles and conditions within company
The Fair Work Commission (FWC) recently dealt with a case that highlights the issues of changing roles within a company.
A worker claimed he was dismissed after raising concerns about underpayment in his new position as a site manager.
The employer, on the other hand, argued that the worker had voluntarily resigned.
This dispute brought to light issues surrounding pay structures, overtime rates, and the importance of clear communication in employment relationships.
The worker started with the company as a plumber in May 2021. He was promoted to leading hand in September 2022, and then to site manager in February 2023. The site manager role came with a pay increase to $62.50 per hour and a company utility vehicle.
However, the worker never received a written contract for the site manager position. The company said they had prepared a draft contract but couldn't confirm if they had given it to the worker. This lack of formal documentation became a key issue in the case.
The company, John R Keith (NSW) Pty Limited (JRK), is contracted to provide plumbing, drainage and civil engineering services on building sites. The worker's progression through different roles within this industry context would prove significant in the dispute.
As a site manager, the worker had to work 40 hours per week plus overtime. This was different from the company's Enterprise Agreement, which set out a 36-hour week with overtime pay for extra hours.
In March 2024, the worker started questioning his pay. He realised his yearly salary was less than the rates in the company's Enterprise Agreement. Over several weeks, he tried to address these concerns with management but felt he wasn't getting anywhere.
The worker's pay was governed by different agreements as he moved through roles. As a plumber and leading hand, he was covered by the John R Keith (NSW) Pty Ltd & CEPU Plumbing Division NSW Branch Plumbing Enterprise Agreement 2019-2023. This was later replaced by a new agreement for 2023-2027, which provided for a 6% pay increase from 1 April 2024.
On 5 April 2024, the worker sent an email to the company. He said he wanted to step down from the site manager job and go back to being a plumber under the Enterprise Agreement. Part of the email read:
"After careful consideration and reflection, I have made the difficult decision to step down from my position as a Site Manager effective from April 22 2024 and return to being a plumber on the JRK EBA Agreement should there be a position available."
This email became a crucial piece of evidence. The company first saw it as a resignation. Later, they argued it was the worker backing out of his employment contract.
The FWC had to decide if the worker's departure was a dismissal under the Fair Work Act. They looked at several factors, including the worker's attempts to get a pay increase and how the company responded to his concerns.
The FWC found that the company had not met its obligation to set the worker's salary at a rate that included overtime when it stayed the same on 1 April 2024. The decision stated:
"[The employer] was in breach of its obligation under the contract of employment to set [the worker's] salary at a rate which included overtime rates when [the worker's] salary remained unchanged on 1 April 2024. This entitled [the worker] to accept [the employer's] repudiation of the employment contract and to relinquish the Site Manager role."
The FWC said this was key in deciding that the employment ended because of the employer's actions, not because the worker chose to leave.
Ultimately, the FWC decided that the worker had been dismissed as defined in the Fair Work Act. It concluded:
"Taking into account the parties' submissions and the evidence before me, I find that the actions of [the employer] in failing to ensure that [the worker's] annual salary was set at a rate which included overtime was the principal contributing factor which resulted directly or consequentially in the termination of [the worker's] employment."
"[The worker] worked under the 2019 Agreement for approximately two years then was appointed to the Site Manager role without having the benefit of a written contract which explained he was expected to work a 40 hour week plus regular overtime," the FWC added.
This case reminds employers to document changes clearly and address employee concerns about pay and conditions promptly. It also shows the problems that can occur when employees change roles within a company, especially when different pay structures and agreements are involved.
