Allied Express appeal struck down

Allied Express to compensate former worker $25,821 after trying to cut her pay and demote her

By Brad Gardner | June 14, 2011

Allied Express will be forced to compensate a former employee $25,821 for unilaterally trying to reduce her pay and demote her.

The full bench of Fair Work Australia has upheld Commissioner Peter Hampton’s ruling from February this year holding Allied Express guilty of unfair dismissal.

The full bench agreed with Hampton that Allied had no right to reduce Maria-Anna Owens’ salary by $18,000 and transfer her to a lesser role without her permission.

Owens walked out on Allied and launched an unfair dismissal claim when it tried to get her to sign the amended terms. She argued it had repudiated the existing contract.

"The learned Commissioner did not err in concluding that there had been a termination of Ms Owens’ employment at the initiative of the Company," the full bench says in its written judgement.

Under the Fair Work Act, a company can be liable for unfair dismissal if a demotion involves a significant reduction in pay or duties. Hampton originally ruled the $18,000 reduction constituted a valid reason for the provision to apply.

Fair Work Australia was told that Allied management had discussed with Owens the prospect of reducing her workload in the lead-up to her maternity leave.

The customer service and accounts manager travelled constantly in her role but became increasingly tired from doing so in the latter part of her pregnancy.

However, Owens never agreed to the company’s terms when it tried to transfer her to a telephonist/customer service role and cut her annual salary from $70,000 to $52,000.

The full bench says Owens made it clear to her manager, Phillip Preece, she did not permit the company to demote her and reduce her pay.

"Mr Preece should have been left in no doubt that Ms Owens had not agreed to the reduced position at an annual salary of $52,000. He did not tell her that she still had the option of retaining her substantive position at $70,000 per annum," the full bench ruled.

It also ruled that Allied Express should not be criticised for looking at options to ease Owens’ workload.

"However, as was found by the Commissioner on the evidence in this case, the process went astray when no agreement was reached between the parties as to the new functions and appropriate remuneration level and the Company nevertheless went ahead with implementing changes," it says.

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