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Reducing casual shifts – what are the risks?

January 06, 2018

By Sid Sidhu, Workplace Relations Advisor, and Emma Treherne, Principal Workplace Relations Advisor, NRA Legal

If my casual employees are not guaranteed hours, can I reduce their shifts?

Often employers believe that they can reduce the hours provided to a casual employee if they are, or have been, causing issues within the business.

Recent case law shows that this approach may very well result in a case before the Commission and reinforces the need to exercise caution when approaching poor performance or misconduct.

Roxanna Balgowan v City of Sydney RSL and Community Club Ltd [2017] FWC 3798

A customer service attendant has won her unfair dismissal case with the Fair Work Commission (FWC) holding that reducing her shifts by 75 per cent amounted to a forced resignation or a constructive dismissal of the casual employee.

The facts

Ms Roxana Balgowan was engaged by the RSL Club for an average of 30 hours per week since October 2015. Within the scope of her role, she was required to perform cash handling duties and in December 2016, she was issued with a warning following a cash discrepancy of $188.75. 

The following year, Ms Balgowan fell pregnant and decided she would leave the RSL Club at the end of July. Around April 2017, Ms Balgowan was working a night shift and on completion, she discovered a second cash discrepancy of $100.

Ms Balgowan reported the discrepancy to her manager and was invited to a formal meeting with the company’s Human Resources Manager, Ms Faaui.  

The Employer argued that it told Ms Balgowan she would be removed from her rostered shifts and required to undergo further training. In response, Ms Balgowan then communicated that she would resign and Ms Faaui accepted her verbal resignation.

During the case, the Employer maintained that it took no actions which would have led Ms Balgowan to believe she should resign and that the applicant was not “dismissed”.

However, Ms Balgowan strongly denied these claims and asserted that there was no offer of further training. She was asked three questions in a brief exit interview and later asked to return her uniforms. By not receiving her regular shifts (which she had received since day one of her employment), she was left with no other option but to resign.  

The outcome

According to Commissioner Cambridge, the relevant question was not whether the word “resign” was uttered during the meeting, but rather whether the applicant was entitled to reject the changed employment conditions imposed on her.

In other words, regardless of intention, was it the actions of the employer which compelled the applicant to resign? 

Here, the circumstances demonstrated that Ms Balgowan’s resignation was because of the actions of the employer.

The employee’s removal from rostered shifts resulted in a 75 per cent reduction in remuneration and was expected to last for up to 3 months. These changes imposed on Ms Balgowan demonstrated an intention on the part of the employer to end the employment relationship by breaching key terms of the employment contract. As such, the FWC was satisfied that it was the actions of the employer which brought employment to an end.

The Court ordered the employer to pay to the employee the sum of $13,566.00, restoring the employee to the financial position she would have been in, had she resigned when she initially intended to do so.  The awarded sum amounted to 16 week’s remuneration.  

Lessons for employers

The key takeaway from this case is that employers must not unilaterally reduce the engagement of regular and systematic casuals, unless they can demonstrate a downturn in work or a valid reason for dismissal.

Employers often attempt to gradually reduce the hours of work allocated to a particular casual citing reduced business activity.

This exposes employers to excessive risk of legal claims unless the employer can produce sufficient evidence to support its decision.

Further, this case serves as a warning to employers that simply characterising a termination of an employee’s employment as a resignation will not protect employers from unfair dismissal claims.

NRA Legal knows the ins and outs of managing employee exits and can help you achieve this by reducing the risk of legal claims. To find out more, call our Workplace Advisors on 1800 RETAIL (738 245).

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