As business needs change, employers may need to alter an employee’s duties, working hours or roster arrangements.
While employers may have some flexibility to make these changes, their ability to do so can depend on the terms of the employment contract, any applicable Modern Award or Enterprise Agreement and the requirements of the Fair Work Act 2009 (Cth).
If these changes are not managed carefully, they can create contractual issues, disputes with employees and potential legal claims.
What the contract actually allows
The employment contract is the starting point when considering whether an employer can change an employee’s duties, hours or work location.
Some contracts include an express variation clause allowing the employer to make reasonable changes. Where no such clause exists, the employer will generally have less flexibility to change the role without the employee’s agreement.
Even so, an employer may still be able to introduce additional tasks where they are consistent with the employee’s position, skills and existing responsibilities. More substantial changes, such as removing core responsibilities or significantly altering the nature of the role, may go beyond a lawful and reasonable direction.
For example, moving a senior manager into a substantially administrative position could amount to a breach of contract if the change is outside the scope of the existing role and the employee has not agreed to it.
Consultation can be a legal obligation, not just best practice
Depending on the employee’s coverage, a Modern Award or Enterprise Agreement may require an employer to consult before implementing certain workplace changes.
Modern Awards contain consultation provisions dealing with major changes and proposed changes to an employee’s regular roster or ordinary hours of work. A major change can include matters such as restructuring roles, transferring employees to other work or locations, altering hours or making significant changes to how the workforce is organised.
Where consultation is required, employers may need to provide information about the proposed change, explain when it is expected to take effect and give affected employees and their representatives an opportunity to respond. For changes to regular rosters or ordinary hours, this includes inviting employees to raise any impact on their family or caring responsibilities and considering those concerns before proceeding.
Consultation does not necessarily mean that employees must agree with the proposal. However, they should be given a genuine opportunity to provide input before a final decision is made.
When a change becomes a forced resignation
Under section 386(1)(b) of the Fair Work Act 2009 (Cth), a resignation may still be treated as a dismissal if the employee was effectively forced to resign because of the employer’s actions.
In Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200, the employee resigned after being pressured by his employer. The Court found that the resignation had been brought about by the employer’s conduct and was therefore a termination at the employer’s initiative.
This can extend beyond an employer expressly telling an employee to resign. In some circumstances, significant changes to an employee’s role, duties or working conditions may contribute to a finding that the employee had no real choice but to leave.
An employee simply being unhappy with a change or believing that their position has become less favourable will not necessarily meet this threshold. The circumstances leading to the resignation and the effect of the employer’s actions will also need to be considered.
Where a resignation is found to amount to a dismissal, the employer may be exposed to an unfair dismissal claim.
Changing duties can affect classification and pay
Changing an employee’s responsibilities can also affect how their role is classified and the minimum rate they are entitled to receive.
For employees covered by a Modern Award, classification levels are generally determined by the work actually being performed, including the nature of the duties, level of responsibility, experience, qualifications and whether the employee supervises others. If an employee takes on more complex work or greater responsibility, their existing classification may no longer accurately reflect the role they are performing.
Employers should pay particular attention where duties are added gradually over time, as the role can eventually attract a higher minimum rate.
The importance of this was highlighted in action taken by the Fair Work Ombudsman against Optus Retail. The company identified failures to apply the correct classification and pay rate to retail consultants who performed higher duties, including opening and closing stores and regularly managing them in the absence of a store manager.
Optus Retail ultimately entered into an Enforceable Undertaking with the Fair Work Ombudsman, a legally binding commitment to rectify the breaches and improve future compliance. It agreed to back-pay more than $7.8 million to 3,744 current and former employees for a range of underpayments, including higher duties and pay errors. It also agreed to make a $450,000 contrition payment and introduce further compliance measures.
Some Modern Awards also require a higher rate where an employee temporarily performs duties above their usual level, with the entitlement depending on the terms of the particular award.
Employers should therefore review whether an employee’s pay and conditions still reflect the work they are actually performing whenever their role changes in a meaningful way. Updating a position description or adding responsibilities without considering the applicable award can create an underpayment risk that continues for as long as the employee remains incorrectly classified.
Practical steps before making a change
- Review the employment contract, applicable Modern Award or Enterprise Agreement to identify any limits on the proposed change and any consultation requirements that apply.
- Consider whether the new duties remain within the scope of the employee’s existing role or represent a more substantial change to their position.
- Check whether additional or higher-level responsibilities affect the employee’s award classification, minimum rate of pay or any higher duties entitlement.
- Where consultation is required, provide the employee with clear information about the proposed change and a genuine opportunity to respond before a final decision is made.
- Put the proposed arrangement and the reasons for it in writing, including when the change is expected to take effect.
- If the change requires the employee’s agreement, document that agreement and update the employment contract or other employment records where appropriate.
Getting advice before making changes
Changes to an employee’s role can have consequences beyond the immediate operational decision, particularly where contractual rights, award obligations or pay entitlements are affected.
Where a proposed change is substantial, getting advice early can help employers understand the process that needs to be followed and identify any legal risks before the new arrangement is implemented.
At Aubrey Brown Lawyers, our Employment Law team can advise on proposed changes to roles, duties and working arrangements, including obligations under employment contracts, Modern Awards, Enterprise Agreements and the Fair Work Act 2009 (Cth).
