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Workplace Relations Act 1996

s.45 appeal against decision [PR919363]

issued by Whelan C on 24 June 2002

Elizabeth Gorczyca


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

Elizabeth Gorczyca


RMIT University








Appeal re termination of employment.


[1] This is an appeal from a decision of Whelan C dismissing for want of jurisdiction an application for relief in respect of termination of employment by RMIT University (RMIT). Ms Elizabeth Gorczyca's (the appellant) employment history is set out in Whelan C's decision and we shall not set it out in full. It is sufficient to say that on 21 June 1996 the appellant was promoted to Associate Professor which was the position she occupied before her demotion by letter dated 21 December 2001. The relevant passage reads as follows:

[2] In demoting the appellant, Whelan C appears to have found that the Vice-Chancellor was acting under Schedule 2 of the certified agreement known as the Royal Melbourne Institute of Technology, Academic and General Staff (PACCT) Enterprise Agreement 2000 [PR900398 [AG804836]] (the certified agreement). It is convenient here to set out some of the provisions of that schedule.

[3] The argument before Whelan C was in essence as follows. The respondent submitted that the Workplace Relations Act 1996 (the Act) did not operate to alter the reasoning of the Commission in Hermann v Qantas Airways Limited (Hermann Case) [PR903096] and Boo Hwa Chan v Christmas Island Administration (Boo Hwa Chan Case) [Print S1443] that a demotion which might otherwise amount to a termination of employment will not do so if the employee's contract contains an express term allowing demotion or where an award gives the employer the option of redeployment or demotion as an alternative to terminating employment.

[4] The applicant submitted that there was a termination of employment within the meaning of s.170CE(1) of the Act. In particular, the applicant relied upon s.170CD(1B) of the Act, a provision inserted into the Act in August 2001 by the Workplace Relations Amendment (Termination of Employment) Act 2000. That provision reads:

[5] It is not an issue before us that the demotion of the appellant involved a significant reduction in the remuneration of the appellant or that she continues to work for RMIT.

[6] Mr Irving, of Counsel, who appeared for the appellant, sought to develop his submission by arguing for three contentions. First, he submitted that in s.170CD of the Act termination should be defined as meaning termination of employment at the initiative of the employer. He then referred to s.170CD(1B) of the Act which we have set out earlier and submitted that if an employee falls within the phrase "termination of employment" then the employee may pursue an unfair dismissal case unless he/she has been demoted and the demotion is not significant in relation to remuneration or duties. He contrasted that position with the position under the former Act where he submitted demoted employees could not pursue an unfair dismissal application and in that regard referred, inter alia, to Strachan v Liquor land (Australia) Pty Ltd (Strachan) [IRC of A, NI 1266R of 1995, 6 February 1996, unreported] and Brackenridge v Toyota Motor Corporation Australia Ltd (Brackenridge) [(1996-1997) 142 ALR 99].

[7] Mr Irving also drew attention to the fact that the provisions of Subdivision B of the Division are not linked to the Termination of Employment Convention, 1982 (the Convention) as are the provisions of other subdivisions within the Division. In this respect he drew attention to Bluesuits Pty Limited t/a Toongabbie Hotel v Graham [(1999) 101 IR 28] and Boo Hwa Chan. He submitted that in late 1999 and 2000 a number of decisions expressed doubt as to whether Brackenridge continued to apply but the legislative change effected in 2000 which lead to s.170CD(1B) clearly resolved the uncertainty. Mr Irving in fact traced the history of the legislation through the Parliament including its consideration by Senate Committee, but we do not find it necessary to set this detail out here.

[8] Mr Irving's second contention was that the employment of an employee is terminated if the employee is demoted and receives a significant reduction and continues in employment. He submitted that the appellant met all of those criteria and in those circumstances, he submitted that in the absence of a contract or certified agreement removing the right to do so, the appellant had a right to pursue an action under Division 3 of Part VIA. In relation to the contract he submitted that Whelan C had made a finding that there was no provision in the contract of employment omitting the demotion of the appellant. That finding was not contested.

[9] I then move to his second point which was the existence of the certified agreement. He submitted that whether there was a termination of employment or not for purposes of the Act was a jurisdictional fact and he submitted "If a certified agreement or a contract says that certain events do not count as terminations of employment, then that does not bind in a determinative way this Commission" [Transcript PN113]. He submitted that it was a question for the Commission to look at all the facts and to decide for itself whether or not the person is an employee and whether or not there has been a termination of employment. He submitted that it was not the role of contracts or certified agreements to narrow or expand the jurisdiction of the Commission over unfair dismissals. It is convenient to set out his concluding submissions from transcript as follows:

[10] For the respondent, Mr Bourke, of Counsel, submitted that Whelan C never adopted an approach where the certified agreement could oust the unfair termination divisions of the Act. What Whelan C did, he submitted, was to construe a term of the Act and the way it operated in the context of the Act as a whole. He submitted that the parties had agreed in a certified agreement that there was a right to demote which did not amount to termination and that if the procedure in the certified agreement was followed, there was no termination. He referred to both Brackenridge and Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia and Grivell [(1999) 74 SASR 240] and submitted that what s.170CD(1B) did was clarify the contractual position to the effect that if you have an insignificant breach of contract it is not a termination of employment, there needs to be a significant breach. He submitted that the intent of the new subdivision was not to disturb the common law position.

[11] He next submitted that a plain reading of the Act would not confine its operation to a strict analysis of the contractual position. He submitted that the position was that a strict demotion may be a termination if there was no right under the contract of employment to make a significant demotion or there is no right under an industrial instrument to make a significant demotion then there is a termination, but where the right exists under either it is not a termination. He gave as an example a relocation or a change of duties. He submitted that Hermann's Case was correct and that Whelan C was entitled to rely on the following passage:

[12] Mr Bourke then submitted that there was clear authority in industrial law that irrespective of the contractual position an industrial instrument could permit demotion and that was so at the time the amendments were put into force. He submitted that the approach in Boo Hwa Chan was adopted by Beasley J in Ryan v Furneys Stockfeeds Limited [(1996) 66 IR 298] and he relied on the passage from the judgement of Latham CJ in Amalgamated Collieries of W.A. Ltd. v True (Amalgamated Collieries) [(1938) 59 CLR 417] quoted in Boo Hwa Chan. He also referred to Quickenden v O'Connor and others [(2001) 109 FCR 243]. He submitted that whilst a certified agreement does not oust the jurisdiction, he submitted that where rights and obligations are imposed, not only by way of contract but by an industrial instrument, those provisions must be applied in a practical and common sense way.

[13] Mr Bourke also made some submissions about Pawel v Australian Industrial Relations Commission and another [(1999) 94 FCR 231] and the word "termination" in the context of the Convention but we do not propose to repeat those submissions here. Finally, when asked about paragraph 1(b) of Schedule 2, Mr Bourke submitted:


[14] We turn first to determine whether the certified agreement gave the Vice-Chancellor an unfetted right to demote the appellant. We think it did. We have set out the provisions earlier and in our opinion they provide that, assuming the correct procedures were followed and it was not suggested they were not, the appellant could be demoted. Such a demotion does not in our view constitute at law a termination. This is because whatever be the contractual position, and Grivell's Case would appear to us at least in so far as this case is concerned, to reflect it, the certified agreement provides for the demotion. The certified agreement derives its legal effect from the Act. It prevails over the contractual position. So much is clear from the judgements in Amalgamated Collieries and Byrne and Frew v Australian Airlines Limited (Byrne and Frew) [(1995-96) 185 CLR 410].

[15] In Amalgamated Collieries Latham CJ said:

[16] In Byrne and Frew the Court said:

[17] It is appropriate to regard the certified agreement in this as the equivalent of the award on the passages mentioned. This position adopted in both these cases is consistent with the decisions of the Commission in Herman's Case and Boo Hwa Chan.

[18] As we understand the submission of Mr Irving however, he argues that not withstanding this position the Act itself creates an inalienable right to contest a termination if the criteria in s.170CD of the Act is attracted. His submission it is in effect that the entitlement cannot be excluded either by operation of contract, award or certified agreement. Put simply the Act gives a right to contest the termination in the circumstances defined.

[19] The difficulty with this approach is, however, that we do not believe that there has been a termination. Mr Bourke rightly argued that the question of whether there had been a termination is a question of jurisdictional fact. Where there is a contract of employment in existence and the contract is brought to an end, it is easy to establish that there is a termination. However, in a case such as this termination must be implied from all of the circumstances, for in reality, the appellant continues to work for the respondent. On her behalf it was argued in effect that the provisions of s.170CD(1B) of the Act mean there has been a termination because of her demotion with the resultant loss of income. The respondent argues there has not been a termination because the certified agreement permits the demotion without regard to the income loss and provides in effect that it is not a termination. We think that the latter proposition is correct. There has not been a termination because the certified agreement operates to preclude there being one in the circumstances of this case. Put another way we think, at law there has been no termination and if there has been no termination we do not see, notwithstanding the provisions of s.170CD(1B) that there has been a termination for purposes of the Act.

[20] Our conclusion in this regard is fortified by the decision in Quickenden v Commissioner O'Connor [109 FCR 243, 265]. In that case Black CJ and French J in a joint judgement at paragraph 69 said albeit in dealing with another point:

and in a separate judgement Carr J said at paragraph 131:

[21] We believe the dicta in these cases reinforces the view that where, as in this case, a certified agreement gives a right to demote without termination, then by virtue of the operation of the Act there is not termination. The fact that in another Division of the Act termination may be defined to include a demotion does in our, simply not assist the appellant in this case. As we have pointed out earlier, what needs to be established to attract the operation of that Division is a termination and in this case by virtue of the operation of other provisions of the Act there has not been a termination.

[22] There is one matter we should mention. Paragraph 1(b) of Schedule 2 reads as follows:

[23] It was suggested that the effect of this paragraph would enliven the jurisdiction of the Commission under s.170CE of the Act. We do not accept this argument. All paragraph 1(b) of Schedule 2 of the certified agreement does is to preserve the jurisdiction of "any external court or tribunal which, but for this Agreement, would be competent to deal with the matter". It was not suggested by the respondent that the Commission's jurisdiction under s.170CE was excluded by the certified agreement. Rather it was suggested that there is no termination of employment which would be sufficient to attract the jurisdiction. We agree with this submission. We do not think that paragraph 1(b) of Schedule 2 of the certified agreement operates to afford jurisdiction where there has not been (as we think there has not) a termination of employment at the initiative of the employer.

[24] For these reasons we agree with the conclusions reached by Whelan C and dismiss the appeal.




M. Irving of Counsel on behalf of the appellant.

J. Bourke of Counsel on behalf of RMIT University.

Hearing details:



August 20.

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