Demotion did not trigger dismissal

Background

In certain circumstances the demotion of an employee can trigger the termination of their employment and allow them to bring an unfair dismissal claim. A recent decision of the Full Bench of the Fair Work Commission (the "FWCFB") has found that an employee who was demoted was not dismissed despite an almost 10 per cent reduction in salary.

Under the Fair Work Act 2009 (the "FW Act") an employee will be found to be dismissed if the employee's employment is terminated at the employer's initiative or the employee has been forced to resign because of conduct engaged in by their employer. The FW Act contains a specific exemption for demoted employees. A demotion will not trigger a dismissal if the demotion does not involve a significant reduction in remuneration or duties and the employee remains employed.