Australia: Demotion not necessarily a dismissal

Last Updated: 29 March 2016
Article by Dominique Lamb

The demotion of an employee may not in all circumstances meet the meaning of dismissed in section 385 of the Fair Work Act 2009 (Cth) (the Act). Consideration must be given to the continuation of employment, the whether the demotion imposed a significant reduction in status and payment.

The recent case of Phillip Moyle v MSS Security Pty Ltd [2015] FWC 8330 sheds light on the indicative criterion when determining if a demotion results in a dismissal.


Mr. Phillip Moyle (the Applicant) was employed with MSS Pty Ltd (MSS) in 2013, and was classified as a Level 5 Security Officer under the Security Industry Award 2010 (the Award).

Following two and a half years of service the Applicant was informed by his employer that he would be transferred either Royal Adelaide Hospital or James Nash House to complete his duties. The Applicant was given seven days to decide on his preferred location.

As a consequence of the transfer, the Applicant's shifts differed, resulting in a loss of night shift loadings, a change in his grade of employment to a Level 3 and a corresponding reduction in his base rate of pay.

As part of the "Security Officer Standing Instructions", the Applicant had agreed to the following as part of his conditions of employment. Namely, the Applicant had agreed to perform his duties and those in the Award classifications levels below his at any site at which MSS held a contract for services (Clause 7.5.2(b)). Furthermore, the Applicant had also consented to his pay and conditions as an employee varying according to the new assignments (Clause 7.5.2(c)).

The Employee's Contentions

Despite such relocations being ordinary and customary practice within MSS and its industry competitors, and following the Applicant's acceptance of the alternative position at the James Nash House site, the Applicant contended that the Respondent had unfairly dismissed him.

Following accepting the James Nash House role, the Applicant raised his concerns as to pay with his employer who offered transitional compensatory payments for one month and confirmed that the Applicant had the choice to continue working on a day/night shift roster to receive late night penalties.

The financial detriment suffered by the employee was a $1.01 base hourly reduction in pay and fewer night shifts that attracted additional penalties under the Award.

As part of his submissions, the Applicant contended that he had only continued to undertake diminished duties under protest, and that "he had done nothing wrong".

Consideration of Case Law and Statute

Senior Deputy President O'Callaghan's (SDP Callaghan) focus at the outset was the jurisdictional issue of whether the Applicant had actually been dismissed by the Respondent. MSS submitted that the reduction in remuneration and changing classifications could not be regarded as significant enough to attract the jurisdiction to make an unfair dismissal complaint.

SDP Callaghan took the plain meaning approach to the interpretation of section 386(2)(c), namely that a demotion in employment can only constitute a dismissal for the purposes of Division 3 of Part 3-2 of the Act if the employee does not remain employed by that employer and the demotion involves either a significant reduction in the employee's remuneration or duties.

SDP Callaghan relied on Barkla v G4S Custodial Services Pty Ltd [2011] FWAFB 3769 as authority for this point. Commentary of the Full Bench in Charlton v Eastern Australian Airlines (2006) 154 IR 239 was also relied on:

"...a termination of employment occurs when a contract of employment is terminated. This necessarily occurs when the employment relationship comes to an end, However it can also occur even though the employment relationship continues. Where a contract of employment has been terminated, but the employment relationship continues, this will be because a new contract of employment has come into existence...
Unless the contract of employment or an applicable award or certified agreement authorises and employer to demote an employee, a demotion, not agreed by the employee, that involves a significant reduction in remuneration will amount to a repudiation of the contract of employment. If that repudiation is accepted, either expressly or by conduct, then the contract of employment is terminated. If, in such circumstances, the demoted employee then remains in employment with the employer, this occurs pursuant to a new contract of employment in respect of the demoted position. It may be noted that where the employment continues with the employee allegedly acquiescing in a reduction in salary or other terms of employment, difficult questions may arise as to whether the continued employment involves the continuation of the original contract of employment..."


In reliance on these cases and a 'plain meaning' reading of section 386(2)(c) of the Act, the allocation of Level 3 duties could not be properly described as a significant reduction in his duties, nor did the demotion severe the employment relationship.

The transfer to a new location and adjustment in duties and remuneration were consistent with the employment contract, and there was no identified repudiation of the employment contract.

Rather, SDP Callaghan considered the Applicant had standing to pursue a dispute resolution process through the Award dispute resolution provisions (Clause 9).

This decision has been confirmed by the Full Bench of the Fair Work Commission, but qualified that the Respondent does not bear the responsibility to negative both limbs of exception under section 286(2)(c) of the Act.


This decision identifies the important considerations for employers when demoting an employee, including continuity of employment and relative reduction in status and pay. Despite acceptance of the alternative role, these factors should be considered alongside the contract of employment and in light of any potential risks of unfair dismissal.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.