Is it a demotion if an employer changes a worker's role?

The Fair Work Commission (FWC) recently dealt with a case involving a worker who argued her employer took adverse actions against her by altering her role in the workplace. 

In its defence, the employer contended that no dismissal occurred and that, at all times, the worker was employed in the same role. 

Was the role validly altered?

Around early 2021, the worker was first engaged to work for the company as a temporary human resources administrator. Months later, the worker started her permanent employment as the human resources administrator.

The worker’s employment contract stated, “Your position title, objective, responsibilities and the person/position that you report to may, at the discretion of the company, vary significantly during your employment.”

“In the event of any variations as referred to above, the remaining terms of this contract will continue to apply to you unless altered in writing,” the contract read. 

Change in title

In a letter sent to the employer, the worker’s legal representatives stated that the company altered the worker’s line of reporting and altered the worker’s position title from HR Manager to HR Administrator, reducing both the complexity and sophistication of the worker’s position.

They further argued that the position alteration constitutes a breach of the worker’s employment agreement. 

“The Position Alteration is evidence that our client’s contractual position is not required to be performed by anyone and accordingly, is redundant and a suitable new role has not been offered nor was there consultation,” the letter read. 

Meanwhile, the employer argued that there had been no repudiation of the contract because no change of any substance was made to the worker’s position. 

It argued that the employer was always employed as a human resources administrator and denied that the worker was ever promoted to human resources manager. 

The employer further said that it was clear that the worker no longer intended to be bound by the employment contract. Hence, the company considered this a repudiation of the employment contract and accepted that repudiation, bringing the contract to an end.

FWC’s decision

After examining the case, the Commission was not satisfied that there was ever an agreement between the worker and the employer and the worker was the company’s HR manager. Hence, the worker was demoted. 

“It must then follow that there was no repudiation of the HR Manager contract, because no such contract ever existed,” the FWC stated. “There being no repudiation, there was no ‘termination on the employer’s initiative.’”

The Commission also noted that the worker’s employment contract expressly contemplated significant “title, responsibilities” and reporting lines changes. 

Such a broad discretion vested with the employer suggested that there could never be a repudiation of the contract. 

“I am satisfied that, for all intents and purposes, the [worker’s] role was not changing,” the Commission stated. “The reaffirmation of the HR Administrator title did not amount to a repudiation of the contract of employment.”