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Workplace Relations Act 1996

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



Qantas Airways Limited

(U No. 33490 of 2000)



Alleged unlawful termination - arbitration


[1] In this matter the applicant, Mr Ralph Hermann, has lodged an application in which he asserts that his employment was terminated at the initiative of the employer and that the termination was harsh, unjust or unreasonable. The respondent denies that the applicant's employment has been terminated and, in the event that the Commission was to find that a termination had occurred, asserts that the employer's actions were not in the circumstances harsh, unjust or unreasonable. The matter was the subject of conciliation but this was unsuccessful and a certificate was issued pursuant to section 170CF(2) of the Act. The applicant elected to proceed to arbitration. The applicant was represented by Ms Doyle of counsel and the respondent by Mr McKenzie.


[2] The applicant has been employed by Qantas Airways Limited since November 1974. He held a number of positions primarily involved with loading and unloading operations at the airport and worked his way up to Duty Ramp Manager in 1991. In 1998 he was appointed to the position of Duty Airport Manager (DAM). The applicant's appointment to this position was somewhat controversial. The applicant was also an active union member and at various times held elected positions within the Australian Transport Officers Federation (ATOF) and later the Australian Services Union (ASU).

[3] The applicant gave evidence concerning his duties as Duty Airport Manager which is the highest operational position below the Airport Manager. At the time of his employment as a DAM there were four DAMs who worked shifts, and six employees who were in other classifications but able to relieve as a DAM. There was a DAM on duty at the airport at all times except for the hours between 1.30 a.m. and 5.00 a.m. The DAM had a telephone which could be used both as an office extension or a mobile phone.

The events of 25 August 2000

[4] On 25 August the applicant was rostered to work from 3.00 p.m. to 1.00 a.m. He was offered a ticket to the football that evening for a game which was due to start at 7.45 p.m. After some initial reluctance a fellow DAM, Mr Fitzgerald agreed to work part of the applicant's shift for him - from 6.30 p.m. to 1.00 a.m. - on the basis that the applicant worked a full shift for Mr Fitzgerald on the following Thursday. It was not unusual for DAMs to swap shifts. It was the evidence of Mr Hermann and Mr Brassington that such swaps did not need to be authorised by the airport manager although Mr Fitzgerald suggested otherwise.

[5] Mr Hermann gave evidence that at 4.10 p.m. approximately his son telephoned him to ask of he could go to the football. He arranged to meet his son to drive him home after the game. His son was to take the train to the city. At approximately 5.10 p.m. his wife rang to tell him that an aunt had suffered a stroke. As they could not contact their son, Mr Hermann arranged to meet his wife at Spencer Street Station to try to find their son as he got off the train. They then intended to drive to Geelong.

[6] Mr Hermann stated that he then telephoned Movement Control to tell them that he had to leave the airport early. He asked if he should have his calls diverted to Movement Control or to give his phone to the Customer Service Co-ordinator. He was told to give the phone to the Customer Service Co-ordinator, Mr Lowres. At 5.20 p.m. he gave the phone to Mr Lowres advising him that Mr Fitzgerald would be there soon.

[7] Mr Hermann says he then went to Gate 4 International where Qantas staff where dealing with passengers from a disrupted flight. He left the airport at approximately 5.40 p.m. and went to Spencer Street by taxi. He met his wife at the station at approximately 6.40 p.m. but they were unable to find their son. They decided to go to the MCG to see if they could find him there.

[8] The Hermanns drove to the Hyatt, leaving the car there, and walked to the MCG, arriving shortly before half-time. Mr Hermann went into the ground and to the Junior Members' area where his son usually sat but was unable to find him after five minutes looking. He spoke to his wife. They decided that she would go home and he would stay at the football, meeting his son as arranged after the game. Mr Hermann and his son got a taxi back to the airport, collected his car and drove home. The following day they were advised that the aunt was in a coma. She died without regaining consciousness.

[9] It was Mr Fitzgerald's evidence that Mr Hermann had told him that he had a ticket to the Pacific Dunlop corporate box at the MCG that night. Mr Hermann's evidence was that although he was member of the MCG the ticket he had on that night was for the Southern Stand. He denied that he was going to a corporate box.

[10] The evidence of Mr Lowres was that he had the Duty Airport Manager's phone from about 5.15 p.m. or 5.20 p.m. until he gave it to Mr Fitzgerald when he arrived at the airport at around 6.00 p.m. He answered three calls during the time he had the phone.

[11] At around 6.00 p.m. there was an incident where a baggage tug collided with an aircraft. Mr Sunstrom, a Ramp Co-ordinator attempted to ring the DAM. There was no answer. He tried several times. He was unable to say precisely what time this was.

[12] Mr Bradley, the Ramp Services Manager was notified at approximately 6.10 p.m. about the incident. He telephoned Mr Mielli, the Duty Resource Co-ordinator, to obtain more details. He was advised that the DAM could not be contacted. He tried to call the DAM but the phone just rang out. At this stage he rang the Airport Manager.

[13] Mr Dobeson's evidence was that in response to the call from Mr Bradley he tried to ring the DAM at around 6.20 p.m. The number rang out. He rang again and the phone was answered by Mr Fitzgerald. He asked Mr Fitzgerald if he was aware of the accident and was informed that he was on his way to the scene.

[14] Mr Fitzgerald's evidence was that he arrived at work around 6.20 p.m. and was approached by Mr Lowres who gave him the phone and told him that Mr Hermann had had to go early. He then got a call shortly after to say that there was an accident in bay 9. The phone call was from Movement Control. Mr Dobeson rang him while he was on his way to the scene.

Events following the incident

[15] Mr Hermann returned to duty at 5.00 p.m. on Saturday 26 August. There was a note for him from Mr Fitzgerald about the accident the previous night with advice to call Mr Dobeson, the Airport Manager. Mr Hermann says that he telephoned Mr Dobeson at about 7.00 p.m.

[16] Mr Dobeson was quite abrupt with him and told him to come and see him next time he was on shift about his absence from the airport on the Friday evening. Mr Dobeson's evidence was that he asked the applicant why he had not contacted him before he left the airport. The applicant did not give an explanation and no mention was made of the sick aunt.

[17] Mr Hermann met with Mr Dobeson on Monday 28 August. He apologised to him about leaving early on the Friday. Mr Dobeson asked him if he had gone to the football. He agreed that he had saying he had to pick up his son. Mr Dobeson asked him what time he had left to which he replied 5.40 p.m. Mr Dobeson then told him that he was lying and that his car was not in the car park at 5.00 p.m. Mr Hermann was advised that Mr Dobeson would see him again on the Thursday.

[18] Mr Dobeson in his evidence about the Monday meeting indicated that Mr Hermann told him he had some family reasons for wanting to leave work early and referred to the sickness of a relative. He asked Mr Hermann why he did not tell him at the time. The applicant responded that he had had a mental blank. He raised with Mr Hermann a previous incident when he claimed Mr Hermann had lied to him. He told the applicant that he viewed the matter very seriously and it could lead to the termination of his services.

[19] On the Thursday Mr Dobeson went through the matters of the Friday night. He told Mr Hermann that he did not have the authority to delegate the responsibilities of his position. His absence was totally inappropriate and he had made no attempt to contact the airport manager. In his, Mr Dobeson's view, the matter was misconduct warranting termination but taking into account Mr Hermann's length of service he would not terminate his employment. He suggested that Mr Hermann take leave immediately and told him that on his return he would be in the position of Movement Control Officer. Mr Hermann protested saying that he thought Mr Dobeson was being unfair.

[20] A letter was subsequently sent to Mr Hermann outlining the reasons for Mr Dobeson's decision to demote him. The letter concluded:

[21] Mr Hermann subsequently sought the advice of his union. On 18 September he met with Mr Dobeson and Mr Black, Manager HR Airports, and Ms Stitt, an officer of the ASU. A written statement from Mr Lowres of the incidents on 25 August was also provided by the union. Ms Stitt gave evidence that she believed that Mr Dobeson and Mr Black did not accept the applicant's version of what had occurred on 25 August 2000. The union requested that the company review its decision.

[22] After a short adjournment the company stated that they were not prepared to change the decision. The core issue was that Mr Hermann was not on duty when he was supposed to be. On 20 September 2000 the union was advised that the applicant's position was to be filled on a temporary basis for six months. It would be re-advertised and Mr Hermann would be eligible to apply.

[23] It was clear from the evidence before the Commission that Mr Dobeson would oppose Mr Hermann being re-appointed to the position of DAM.


[24] The submissions of the parties dealt with two issues: was there a termination at the initiative of the employer, and if so, was the termination harsh, unjust or unreasonable?

Termination at the initiative of the employer

[25] The applicant submits that a demotion may constitute a termination of the employment of an employee within the meaning of section 170CE. The decision in Brackenridge v Toyota Motor Corporation (1996) 142 ALR 99 was dictated by the provisions of the Industrial Relations Act which were required to be read in the light of the applicable ILO Conventions. This is no longer the case. The equivalent provisions of the Workplace Relations Act 1996 do not refer to the international conventions and there is nothing to exclude from the operation of the Act terminations which occur where an employee has their employment in one position terminated and accept employment in an alternative, lesser position.

[26] Ms Doyle referred to Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia and Grivell (1999) SASC 300 where the Court made a distinction between the common law position and the decision in Brackenridge. She further referred to Bluesuits t/as Toongabbie Hotel v Graham [Print S0282] where a Full Bench of the Commission considered that there was no requirement to read the provisions of Division 3 of Part VIA of the Act by reference to the intentions expressed in the ILO Conventions.

[27] While not every demotion will constitute a termination of employment within the meaning of the Workplace Relations Act 1996, the Commission ought to find that a demotion which represents a substantial diminution in status, responsibilities, duties and/or salary may constitute a termination of employment. Alternatively, a demotion which would constitute a breach of contract at common law is a termination for the purposes of the Act.

[28] In Boo Hwa Chan v Christmas Island Administration [Print S1443] Polites SDP referred to the decisions in Grivell and Bluesuits and considered that the Commission was no longer constrained by the ILO Convention provisions as expressed in Brackenridge. A similiar approach was adopted by Raffaelli C in AWU v Rail Services Australia [Print S3359]. It was submitted that the tests relied upon in the following cases were appropriate:

· Cowell v Irlmond (1997) 1117 FCA;

· Keast v Mobil Oil (1997) IRCA 245/97; and

· Quinn v Jack Chia (1992) 1 VR 567.

[29] On the facts, Ms Doyle argued that the demotion was not one permitted by Mr Hermann's contract of employment. There is no express statement that failure to comply with a contractual term may entitle the company to take disciplinary action, including dismissal or demotion. The Company's Corporate Policies and Procedural Manual does not form part of his contract of employment and, in any event, the disciplinary procedures set out in the manual were not followed. The decision to demote was out of all proportion to the disciplinary goal sought to be achieved.

[30] The respondent submits that a demotion does not constitute a termination for the purposes of section 170CE of the Workplace Relations Act 1996. Mr McKenzie referred to section 170CA as clearly requiring the Commission to consider the Termination of Employment Convention when applying Division 3 of the Workplace Relations Act 1996. Advertiser Newspapers v Grivell can be distinguished because it concerned the application of the South Australian legislation. Bluesuits v Toongabbie refers to the fact that there was no requirement under the current Act to interpret the provisions of subdivision B by reference to the Convention. Nonetheless the respondent submits that it is appropriate to give "termination of employment" its ordinary meaning, that it, termination of the employment relationship.

[31] In Boo Hwa Chan, Polites SDP did not consider it necessary to form a final view on the matter and in AWU v Rail Services Australia, while Raffaelli C refers to the argument as persuasive he was dealing with a section 99 matter and declined to intervene in the company's decision.

[32] Mr McKenzie further submitted that by virtue of his letter of appointment the terms of the company's Corporate Policies and Procedures Manual were incorporated into the applicant's contract of employment. The manual sets out a range of disciplinary options which might be considered as alternatives to termination of employment which include "demotion". The respondent was entitled to demote the applicant and there was no breach of his contract of employment.

Was the demotion/termination harsh, unjust or unreasonable?

[33] Ms Doyle argued that the applicant's evidence of what occurred on the evening of 25 August should be accepted. It was not suggested or put to the applicant that his aunt was not ill and there is nothing to explain why he would leave the airport at 5.40 p.m. unless it was a reaction to the news about his aunt. Qantas have attempted to suggest some other reasons which were denied. Qantas has attempted to suggest that the applicant left the airport, even earlier than he has stated and rely on the evidence of Ms Punter that she did not see his car in the car park when she left at 5.15 p.m. The applicant submits that Ms Punter is mistaken in this.

[34] Mr Hermann was open about his movements. His evidence that he informed Mr Murphy in Movement Control of his departure was uncontested. He also informed Mr Lowres and left a note for Mr Fitzgerald.

[35] On the divergence in the evidence as to the timing of events after Mr Hermann's departure, it is submitted by Ms Doyle that the evidence of Mr Lowres ought to be accepted because he was the only witness who reduced his recollections to writing in the short period after the events. He could recall details about the number of calls he received and who they were from. The evidence suggests that a number of phone calls were made by a number of people in a short period of time. It is unlikely that people could now clearly recall if the DAM's phone rang out or was engaged. The phone calls in question could have been made after Mr Fitzgerald had received notification of the accident from Movement Control and was making his way to the scene - making on his own evidence, a number of calls as he went.

[36] The applicant submits that there are times when there is no DAM rostered on. There are many occasions when DAMs attend meeting or are otherwise occupied and divert their phones or leave them with the Airport Manager's secretary. Sometimes a DAM cannot be reached. This is borne out by the evidence of Hermann, Lowres, Brassington and May. There are times when DAMs for personal or family reasons are temporarily unavailable or leave work early.

[37] While the DAM is an important position with a high level of responsibility, the DAM is only one person. Qantas staff are trained as to what to do in the event a DAM cannot be reached. They do not have the sole role to play in the event of an accident or emergency. Mr Hermann when he had to leave formed the view that it was appropriate to give his phone to Mr Lowres as he was the most senior person on duty at the time and was trained to deal with accidents and emergencies.

[38] It cannot be said that the "unauthorised absence" as a blanket proposition is unacceptable and, therefore, provides a valid reason for the termination. The effect or consequences of an unauthorised absence cannot be determinative of the question whether there is a valid reason for the termination.

[39] The applicant left work early. His reason for doing so should be accepted. The respondent has not established, on the balance of probabilities that his reason for leaving early was a lie. What happened thereafter is irrelevant.

[40] Ms Doyle questioned the process adopted by the respondent. She submitted that Mr Dobeson was blunt with the applicant in the conversation on 20 August and his focus was on the fact that Mr Hermann had attended the football. He did not give the applicant an opportunity to explain the sequence of events on the Friday night. His only investigation of the events involved his discussions with Ms Punter, Mr Brassington and Mr Fitzgerald. It is clear that on the basis of Ms Punter's statement he acted on the basis that the applicant had in fact left the airport more than one hour before Mr Fitzgerald arrived and had lied about having done so. Mr Dobeson did not tell Mr Hermann on the Monday that his view about when Hermann had left was based on information from Ms Punter.

[41] Ms Doyle challenged whether Mr Dobeson had raised the issue of lying with the applicant on the Monday as it was not put to Mr Hermann in cross-examination. Mr Dobeson appears to have formed the view that there were two possible explanations for the applicant's leaving the airport early. One was that he went home to pick up his son before the game. The other was that he went to a corporate function before the football. These possibilities were not put to Mr Hermann at the time and the fact that he had done so were not put to Hermann in cross-examination.

[42] The applicant further submits that he was not forewarned that the meeting on the Thursday would be for the purpose of informing him of the punishment he might receive. He thought he might receive a warning or be counselled. Between Monday and Thursday Dobeson undertook no further investigation. The decision was a fait accompli prior to the meeting.

[43] The applicant was at all times candid about his action on 25 August. He agrees that was not the best thing he could done. He says he had a "mental blank". He agrees that his actions were capable of compromising safety. However, a single mistake or lapse of judgement does not justify the penalty which was metered out.

[44] It does not appear that Mr Dobeson gave consideration to any other penalty except termination or demotion. He took into account the fact that he had spoken to Hermann eighteen months previously about being late but did not mention this fact to him at the time. His decision was based on unexpressed concerns and assumptions. The applicant was treated differently or afforded less latitude than other DAMs. His appointment to the position appears to have been the source of some tension with other staff. This may have resulted in him being treated more harshly.

[45] The respondent submits that the applicant was demoted due to his unauthorised absence from work. The unauthorised absence of a DAM is unacceptable and compromises safety and security as well as the airline's policies and procedures. An unauthorised absence is sufficient to justify summary dismissal (see Ahmetovic v DMG Industries [Print S3515]; Nikdovski v Tontine Fibres [Print S2181]).

[46] The applicant's evidence showed that he understood the role of the duty manager and the importance of the DAM being at the airport at all times. He accepted that the absence of the DAM compromises the ability to deal with an accident or emergency. He accepted that it was a breach of trust if he as DAM left the airport.

[47] The applicant's evidence that there are many occasions when the DAM is not contactable was contradicted by the evidence of Mr Brassington, Mr Fitzgerald and Mr Dobeson. The evidence concerning the occasion when Mr Fitzgerald left the airport early shows that he contacted Mr Dobeson to say that he was feeling ill and might have to leave early. When he left the airport he gave Movement Control his mobile phone number and remained contactable. On another occasion he arranged for Mr Brassington to finish his shift and did not leave until Mr Brassington arrived.

[48] Mr Fitzgerald, Mr Brassington and Mr Dobeson gave evidence that at a meeting of DAMs it was agreed that the afternoon shift would start 30 minutes early to assist Ms Higgs with her child care arrangements. Mr Brassington was not aware of Ms Higgs leaving early nor was Mr Dobeson. The applicant's recollection of the meeting where the arrangement was made was vague. If he did arrive and Ms Higgs was in the car park or was not there, then he was not complying with the arrangement.

[49] The DAM cannot delegate the role of DAM to a person not trained in the role. Mr Lowres was not trained. Mr Brassington and Mr Fitzgerald both gave evidence that a DAM should not leave the airport unless the shift is covered. Leaving the airport unattended was a serious matter and amounted to serious misconduct.

[50] The applicant's evidence about the events of the Friday night does not make sense. Mrs Hermann would have driven past the airport to get to the city from Romsey and could, therefore, have picked him up. His evidence that he took a taxi to Spencer Street is inconsistent with the evidence of Ms Punter that his car was not in the car park at 5.20 p.m. The applicant's failure to contact Mr Dobeson which he described as a "mental blank" was inconsistent with the normal processes required of a DAM. Mr Dobeson gave evidence that he was still at the airport at 5.40 p.m. If the matter was so urgent that he had to leave the airport, the applicant should have contacted him.

[51] There is a gap of about 90 minutes between when the applicant says that he arrived at Spencer Street station and when he says he arrived at the MCG. This gap is not adequately explained. He was able to meet his wife at the station but not his son. It is open for the Commission to conclude that the applicant's evidence on this is a fabrication. Once at the MCG his evidence was that he barely spent five minutes looking for his son in the area where he expected him to be before deciding to stay at the game and abandoning the idea of driving to Geelong.

[52] Given that his sick aunt was the reason for leaving work on the Friday, his actions in failing to go to Geelong on either the Saturday, Sunday or Monday is inconsistent with the need to leave work some 40 minutes before he was due to be relieved on the Friday. It is the respondent's submission that the whole story of the events on the Friday evening is most likely a fabrication. It is significant that no mention was made of the sick aunt in the discussion with Mr Dobeson on the Saturday.

[53] Mr Dobeson concluded that for a period of time, possibly over an hour there was no DAM on duty. The applicant went to the football. The applicant failed to contact him prior to leaving the airport. The applicant's actions amounted to serious misconduct. He advised the applicant on the Monday that the matter was serious and may lead to disciplinary action including termination.

[54] On the Thursday Mr Dobeson gave the applicant the opportunity to provide a further response or clarification. Nothing further was provided. The letter to the applicant was sent by mail following the meeting. The meeting with the ASU on 19 September did not change the fact that the applicant had left the airport without contacting Mr Dobeson.

[55] The company's actions in demoting, rather than dismissing the applicant was appropriate and took into consideration all the circumstances of the situation. Mr McKenzie referred to Flight Attendants Association of Australia v Qantas Airways Ltd [Print M0948]. In certain circumstances the Commission has indicated that demotion is, appropriate and fair (see Tolsma and Sell v La Trobe Regional Hospital [Print S7079] and Reyn, Wilson, Griffith and Colson v Qantas Airways Ltd [Print S4850]).

[56] At common law conduct destructive of the necessary confidence between employer and employee would constitute a ground for dismissal (Concult Pty Ltd v Worrell (2000) HCA 64). If the employee's conduct provides a lawful justification for summary dismissal, the employer is a long way towards repelling an allegation that the dismissal was harsh, unjust or unreasonable (see Lane v Arrowcrest Group Pty Ltd (1990) 43 IR 210, Byrne v Australian Airlines Ltd (195) 185 CLR 410).


Was there a termination of the applicant's employment?

[57] The first issue here is whether a demotion, in circumstances where the employee chooses not to leave their employment but to continue in the new position, while disputing the right of the employer to effect such a change, can amount to a "termination of employment" within the meaning of Division 3 of Part VIA of the Act.

[58] Authority for the proposition that a distinction can be drawn between the "termination of employment" and "termination of the contract of employment" derives from the decision of the Full Bench of the IRCA in Brackenridge v Toyota Motor Corporation. The legislation under consideration at the time was the Industrial Relations Act. Section 170CA of the Act provided:

[59] Section 170CB of the Act provided:

[60] The Full Bench in Brackenridge referred to the approach of Moore J in Strachan v Liquorland (Australia) Pty Ltd where his Honour, after examining the Convention and Recommendation found that those instruments were intended to deal with a loss of employment by an employee and that the termination of employment contemplated by those instruments and, therefore, by the relevant sections of the Act, was "termination that has brought to an end the employment relationship". The Court concurred with that approach.

[61] The applicant in Brackenridge had also sought damages in the accrued jurisdiction of the Court for breach of contract. On that issue the Full Bench found that the change of duties and change in classification of the appellant were of such a degree that it should be held that a new contract of employment replaced the old one and that Toyota had terminated the old one. They disagreed with the trial judge in finding that there was no implied term of the contract of employment giving Toyota a power to demote as a disciplinary measure, finding that the contract would not be ineffective without such a term being implied (applying the test in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266).

[62] It is clear that the legislation which formed the basis for the decision in Brackenridge has altered since that decision. As a Full Bench of this Commission pointed out in Bluesuits t/as Toongabbie Hotel v Graham, the objects of Division 3 of Part VIA has changed. Section 170CA(1)(e) still contains as part of the principal object of the Division that:

[63] Importantly, section 170CD(2), which effectively replaced section 170CB, now provides:

[64] The Full Bench in Bluesuits concluded that the inference was unmistakeable that terms used in Subdivision B which also appear in the Convention do not necessarily have the same meaning. They, therefore, concluded that there is no requirement under the current Act to interpret the provisions of Subdivision B by reference to the Convention.

[65] In considering the meaning of "dismissal of an employee" in the context of the provisions of the Industrial and Employee Relations Act 1994 in Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia and Grivell ("Grivell") Bleby J, with whom Doyle CJ and Martin J concurred found that (at paragraph 25):

[66] In dealing with the decision in Brackenridge Bleby J referred to the object of the Industrial Relations Act being to "give effect to the Convention" (which would appear to be on par with section 111 of the SA Act which at section 111(1) states "In enacting this Part, it is Parliament's intention to give effect to the Termination of Employment Convention") and also to the fact that "expressions used in it were to have the same meaning in the Act". He concluded that for this reason:

[67] An argument, based on the decision in Grivell was addressed by the applicant in Boo Hwa Chan v Christmas Island Administration. Polites SDP was not required to determine the issue because of his conclusion that:

[68] He nonetheless made the following observations:

[69] In a further case cited by the applicant, AWU v Rail Services Australia, Raffaelli C considered the decision in Grivell and Bluesuits and concluded that he should adopt "the principles expressed in Grivell's case". He found, applying those principles that there was a "persuasive argument" on the facts that the demotion of the employee concerned was a termination of employment. As the matter had come before him, however, as a section 99 notification and not a section 170CE application, he did not finally determine the matter.

[70] It is clear from decisions such as Sammartino v Mayne Nickless Express t/as Wards Skyroad [Print S6212] that for the purposes of section 170CE an employee generally speaking is defined according to the principles applied by the common law in determining the existence of a contract of service. The employment relationship is one in which there exists a common law contract of employment. Where a contact of employment is terminated, even if it is replaced by a new contract, there may have been a termination of the employment, notwithstanding a subsequent re-engagement by the employer under a fresh contract of employment (Grivell, at paragraph 42).

[71] In any specific case it will be a question of fact whether a change of duties amounts to a termination of the contract of employment and the creation of a new contract supplanting the old contract of employment or a variation of the original contract (Quinn v Jack Chia (Australia) Ltd (1992) 1 VR 540).

[72] In the absence of the requirement to interpret the provisions of subdivision B of Division 3 by reference to the Termination of Employment Convention, it would appear open to the Commission to apply the common law principles and conclude that a termination of the employment contract provided the basis for an employee to make an application under section 170CE(1) for relief as an "employee whose employment has been terminated".

[73] This interpretation of "termination of employment" may create some difficulties if we are to assume that the provisions of sections 170CK, 170CM, 170FA and 170GA require that the words "termination of employment" are to be given a different meaning and should continue to be interpreted, in accordance with section 170CB, as having the meaning found to be consistent with the Termination of Employment Convention in Brackenridge.

[74] For the purposes of these proceedings I am prepared, however, to find that a demotion which at common law would amount to a termination of the employee's contract can be a "termination of employment" within the meaning of Division 3.

[75] In this case, however, another question arises. While it is clear from Brackenridge that a general power to demote an employee for disciplinary reasons cannot be regarded as an implied term of the employment contract, Qantas argues that it was an express term of the applicant's contract in this case.

[76] The applicant's letter of appointment states as follows:

[77] The copy of the manual produced to the Commission, dated October 1997 contains the following statement in the section "Counselling and Disciplinary Procedures Policy":

[78] The applicant argued that the manual did not form part of the applicant's contract of employment and was not provided to him either on the occasion of signing his letter of appointment or subsequently. The manual was a multiple volume set of changing documents which could not realistically be incorporated in his contract of employment and contained matters which were not relevant to his contract. There was no express statement in the letter of appointment that failure to comply with a contractual term may entitle the company to take disciplinary action, including dismissal or demotion. There was nothing in the award or EBA which would permit demotion.

[79] I am satisfied that in dealing with this issue it is appropriate to consider the approach of the Full Court of the Federal Court in Riverwood International Australia Pty Ltd v McCormick (2000) FCA 889. That case concerned the question of whether the express terms of Mr McCormick's contract of employment incorporated by reference the terms of a redundancy agreement negotiated between Riverwood and the Printing and Kindred Industries Union (PKIU). The judge at first instance had also considered that it was an implied term of the contract of employment that McCormick had an entitlement to the redundancy payment in accordance with the redundancy agreement. As that is not an issue in this case I will not refer further to that argument.

[80] The question turned on the interpretation to be given to the following statement in the applicant's letter of offer. The applicant had signed and returned an "acceptance" of offer which stated:

[81] Amongst those terms and conditions was the following:

[82] The redundancy agreement in question was inserted in a document called "Human Resources Policies and Procedures Manual".

[83] Lingren J, on appeal found against Mr McCormick. He considered that the words "all company policies and practices" should not be construed to mean the "Human Resources Policies and Procedures Manual". The purpose of the clause in the letter of appointment, in his view, was to acknowledge the right of management to manage. It was not necessary to find that the words referred to the manual or that they imposed an obligation on the company to abide by the manual in order to make sense of the letter.

[84] North and Mansfield JJ disagreed. North J considered that:

He further considered that it was not necessary to determine the effect of the inclusion of new policies or practices in the manual after the date of the initial agreement as the manual contained essentially the same terms at the time of the contract and the time of the termination.

[85] Mansfield J considered that:

[86] The wording of the applicant's letter of appointment in this case makes specific reference to the "Corporate Policies and Procedures Manual". The copy of the manual produced to the Commission was dated October 1997, a date prior to the applicant's letter of appointment. There was no suggestion that the relevant provisions had altered since that time. I would consider that the words "you are required to observe" and "you agree to abide by" impose similiar obligations.

[87] It was Mr Hermann's evidence that he was not provided with a copy of the manual. There was, however, a copy in the DAM's office. He was familiar with the manual during his role as duty ramp manager and while he was not aware of the detail he was aware of the general subject matter covered in it. He knew that it contained a disciplinary policy.

[88] I am not satisfied that Mr Hermann's lack of knowledge of the provisions of the disciplinary policy prevent the content of that policy from being incorporated into his contract by virtue of the express reference to the "Corporate Policies and Procedures Manual" in his letter of appointment. On the basis of the reasoning of the majority in Riverwood v McCormick and taking into account the basis for the decision of the dissenting judge in that case, in my view, the terms of the disciplinary procedures policy were expressly incorporated into the applicant's contract of employment. As such, Mr Hermann in accepting the position had agreed that the company in the context of a disciplinary matter, could demote him as an alternative to termination of employment. That express term overrides the common law position that the demotion of the applicant, under the circumstances of this case could have amounted to a termination of his contract of employment.

[89] On the basis of those conclusions I am not satisfied that there was termination of the applicant's employment when he accepted, albeit under protest, the position of Movement Control Officer and ceased to hold the position of Duty Airport Manager. Having reached that view I do not consider it to be necessary to address the question of whether the "termination" was harsh, unjust or unreasonable.

[90] The application is, therefore, dismissed.




R. Doyle of counsel for R. Hermann.

J. McKenzie for Qantas Airways Limited.

Hearing details:



February 28,

March 1.

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