AREEA examines a recent Federal Circuit Court decision where an employee, terminated for refusing to change duties, was awarded full redundancy but failed on his adverse action claim.

THE Federal Circuit Court has ordered a full redundancy be paid to a white collar worker who was terminated for refusing to undertake manual work, but rejected his application for adverse action.

The case primarily highlights that an employee can refuse alternative work to their relevant employment contract, and an employer’s breach of this contract could result in payment of redundancy entitlements.

In a secondary lesson for employers, it also demonstrates the risk of the Fair Work Act’s ‘adverse action’ provisions, given the ability for employees to make speculative claims.

Background

The applicant worked at a manufacturing company between November 1994 and April 2016. The factory was owned by ADCO Controls Pty Ltd and taken over in 2013 by CMP Controls Pty Ltd.

The applicant had worked on the factory floor at times during this period of service, most recently in 2002, but principally his duties pertained to office work and purchasing under a 2009 contract with ADCO Controls.

Following the take-over, CMP Controls Pty Ltd issued a new contract which stated, “You are employed by the Company as its Senior Buyer. In your role, you will perform the duties and undertake the responsibilities assigned to you and otherwise work in accordance with the directions given by your immediate manager.”

The new contract also stated: “During the course of your employment, the Company may make reasonable changes to your duties/responsibilities to meet the needs of its business, so long as such changes are still consistent with your areas of career expertise and experience.”

In March 2016, the company asked the applicant to change duties to factory work. He told the company he ‘did not have the skills and experience required to perform forklift, packaging, strapping and material handling duties’.

He attended two meetings on 18 and 19 April last year and agreed in the second meeting to perform factory work.

He rescinded this in an email on 21 April 2016, on the grounds that he had felt pressured to accept the change in work duties.

“I am unable to accept the majority of the tasks highlighted in (new contract) relating to packaging of the product whether it be strapping/wrapping/packaging, forklift work and any work relating to the factory floor. It is not in my area of career expertise and experience and it is not work that I am comfortable with,” the applicant wrote to his employer.

He also set out a series of office work duties he could carry out and ‘was prepared to take on any office bound roles similar to his current employment.’

When it became clear that the employee was not prepared to take on the new duties prescribed by his employer, he was terminated.

Federal Court awards redundancy, not adverse action

The former employee filed an adverse action claim against the manufacturing employer, claiming his dismissal was motivated by reasons which included his various employment complaints and his taking of parental leave and sick leave in early 2016.

After reviewing the lengthy details of the matter, Justice Burchardt found that adverse action had not taken place, but that the former employee was entitled to a full redundancy payout.

He found the dismissal was entirely due to the refusal to undertake manual labour.

“Here was a man who had worked for 20 years, relevantly to all effects and purposes, full-time as a white collar office worker,” Justice Burchardt said.

“(The) threat to dismiss and the dismissal took place simply because [the company] wanted the applicant to agree to undertake manual labour and the applicant refused to do so.

“The reason for the dismissal… was clearly expressed and did not rely upon any other aspects of the matter.”

The Judge then turned his attention to whether the man had been unfairly dismissed for refusing to undertake manual labour outside of his expertise, which was found to be ‘entirely reasonable’.

“The contract, like all contracts, needs to be viewed as a whole. The contract expressly contemplated variation of duties within an acceptable range,” he continued.

“On any view of the matter, the demand that the applicant undertake a forklift driving course and undertake forklift driving work, something he expressly, and in my view understandably, said he was not comfortable with, and that he perform ordinary manual labouring work, as I find it to have been, was not: …consistent with your areas of career expertise and experience.”

“It was not misconduct … to refuse the alternative duties he was being demanded to do. It was entirely reasonable for him to do so.”

The man was awarded a redundancy payment of $138,498.42.

Implications for employers

The ‘Adverse Action’ provisions of the Fair Work Act present risks for employers, particularly given the broad meaning of the term and ability for employees to make speculative claims.

This matter highlights that for an adverse action to be successful, there must be clear evidence of a breach of s340 of the Fair Work Act where a workplace right is expressly denied or rejected.

This clarification, while not definitive, would be welcome by employers.

Another important lesson from this case relates to the ability of employers to direct employees undertake work duties that differ from their standard duties or what’s prescribed in their employment contracts.

In this case, despite the employer believing the contract allowed for different duties to be directed, the terms of the contract did not allow for that work to be outside the man’s ‘expertise or experience.’

Due to this, terminating the man’s employment based on his refusal to undertake such work led to determination that this was a genuine redundancy and entitlements were due.

Employers are advised that any directions for employees to undertake outside of their usual duties must be considered ‘reasonable’ and clearly allowable under their employment contracts.

For more information on this matter or any employment contracts or workplace discipline or termination advice, contact your local AREEA office.