Demoted employee not unfairly dismissed

Athena Koelmeyer, Workplace Law

A little known provision of the Fair Work Act 2009 (Cth) (FW Act) provides that an employee will be able to lodge a claim for unfair dismissal if they are demoted in their employment. To be considered a dismissal under the FW Act, section 386(2)(c) provides that the demotion must be accompanied with ‘significant reduction’ in remuneration or duties.

In the recent case of Raymond Butler v City of Wanneroo [2015] FWC 4, the Fair Work Commission (FWC) held that a demoted employee was not unfairly dismissed.


Mr Raymond Butler (the Applicant) was in the position of Acting Business Manager Waste Operations for the City of Wanneroo (the Respondent) at its Wangara Recycling Centre (the Centre) in Western Australia. In this position, the Applicant was responsible for the safety of the Centre and the safety training of the Centre’s employees.

On 6 August 2013, an incident occurred in the centre after the recycling sorting machinery became blocked. In order to clear the blockage, an employee is required to engage the three electricity isolation switches and the switch box is required to be closed and padlocked before an employee is able to clear the blockage.It was alleged that the Applicant did not ensure that safety measures were followed on the day of the incident.

The Respondent undertook an investigation into the incident and it was found that the Applicant had failed to ensure that the established safety measures for dealing with blockages in the machinery were followed. As a result of the Applicant’s actions, another employee was put at risk of harm.

The Applicant maintained that whilst he did not notice that the switch box was not padlocked, the isolation switches were engaged according to the procedure.

In light of the findings of the investigation, the Respondent demoted the Applicant to the position of Waste Operator which was paid at a lower rate. In response to this, the Applicant lodged an unfair dismissal claim.


Before the FWC, the Applicant submitted that he was unfairly dismissed because the investigation of the incident resulting in his demotion was in error, procedurally unfair, and the Respondent did not consider the Applicant’s safety record.

The Respondent submitted that the evidence was that the Applicant did not exercise his safety duties when the incident occurred. This incident was of a serious nature that may have resulted in a serious or life threatening injury to another employee. For the Respondent, the Applicant’s failure to follow the safety procedure as well as not fulfilling the requirements of his safety duties and the Centre’s Safety Management Plan was a valid reason for the demotion of the Applicant.


The Application was dismissed.

Commissioner Williams considered the events surrounding the safety incident and noted that it was common for the machinery to become blocked on a daily basis but that it was well known to staff the procedure that was required to be followed.

The Applicant and other Centre employees provided evidence about the incident. Commissioner Williams ultimately preferred the evidence provided by the Centre employees about the incident which was contrary to that provided by the Applicant. He also concluded on balance that the Applicant ‘more likely than not’ deliberately lied about the position of the isolation switches.

Commissioner Williams held that the conduct of the Applicant in failing to follow the established safety procedure an exposing an employee to risk of injury was a valid reason for his dismissal. In considering the harshness of the dismissal, it was noted that the Applicant was notified of the intention to dismiss him, provided an opportunity to respond and was not refused a support person.

Commissioner Williams commented that the demotion of the Applicant was not a ‘disproportionate penalty’ and held that the dismissal was not harsh, unjust or unreasonable.

Comment – what can your business learn from this decision?

As you are aware, an unfair dismissal application can be made where an employer terminates an employee’s employment. However, businesses should be aware that as the FW Act defines ‘dismissed’ to also include coerced resignations or involuntary demotions, applications alleging unfair dismissal could be made in such circumstances.

(Source: Australian Payroll Association)

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