One common question I am regularly asked is whether an employer has the right to unilaterally (ie without the employee’s agreement) amend an employee’s role. This question is almost always asked in the context of the employee taking offence to the employer’s decision.
The answer to the question depends upon with context in which it is asked.
If the changed role is within the reasonable contemplation of the parties, particularly if a written contract makes express provision for the change, the employer’s actions would not constitute a breach of contract.
The doctrine of repudiation
In Australian common law, and thus in the context of Australian employment contracts, conduct by one party to a contract which is such as to convey to a reasonable person that the other party has renunciated either the contract as a whole or a fundamental obligation under it (for example a significant demotion or reduction in remuneration or substantial change of duties) the “wronged party” may elect to treat the contract as being at an end; see Automatic Fire Sprinklers v Watson (1946) 72 CLR 435.
Examples of such conduct by an employer might be a unilateral and significant reduction to an employee’s remuneration without cause, or a substantial alteration to the employee’s duties without agreement, or a significant diminution of seniority, status or responsibilities. In those events the employee would be entitled to accept the employer’s repudiation of the employment contract, thus terminating the employment.
Unfair dismissal laws
The above common law position is slightly different to the position under the Fair Work Act 2009, which of course contains Australia’s federal unfair dismissal laws. Section 386 of the Act provides that a person has not been dismissed if the person was demoted in employment but (i) the demotion does not involve a significant reduction in his or her remunerate or duties; and (ii) he or she remains employed with the employer that effected the demotion.