100210844

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES GRANT RAYMOND LUKIES

APPLICANT

 -v-

 ALINTAGAS NETWORKS PTY LTD

RESPONDENT

CORAM SENIOR COMMISSIONER A R BEECH

DATE TUESDAY, 28 MAY 2002

FILE NO APPLICATION 1463 OF 2001

CITATION NO. 2002 WAIRC 05633

_______________________________________________________________________________

Result Application alleging unfair dismissal granted and denied contractual entitlements dismissed.

Representation

Applicant Mr T. Dixon (of counsel) and with him Mr N. Whitehead

Respondent Mr A. Power (of counsel) and with him Mr D. Sash (of counsel)

_______________________________________________________________________________

Reasons for Decision

1         Mr Lukies was employed by the respondent between March 1995 and 24 August 2001.  On that date, he resigned his employment.  On 10 August 2001 he lodged a claim in the Commission that he was both unfairly dismissed and that he has been denied certain benefits to which he was entitled under his contract of service.  The respondent’s Notice of Answer and Counter Proposal denies that Mr Lukies was dismissed and states that as a consequence he is not entitled to any of the contractual benefits claimed by him and none have been denied to him.  In addition, the respondent states that if the termination of Mr Lukies’ employment constituted a dismissal then Mr Lukies was under a duty to mitigate any loss he may have suffered which he has failed to do thereby disentitling him to any claimed contractual benefits. 

2         With the agreement of the parties, the evidence in-chief of all witnesses was tendered by way of witness statements.  Evidence was given by Mr Lukies himself and he in turn called evidence from Mr Solmundson and also from Mr West.  For the respondent, evidence was called from Mr ter Kuile, Mr van Weel and from Ms Issko.  In the case of Ms Issko, her cross‑examination was conducted by way of video-link to Melbourne.  All persons who gave evidence were cross‑examined on their evidence. 

3         I find the relevant facts to be as follows.  Mr Lukies is a qualified chemical engineer, a member of the Institution of Engineers Australia and associate member of the Institute of Chemical Engineers Australia.  He is also an Honorary Visiting Fellow (Chemical Engineering) of Curtin University 2001. 

4         He commenced employment with AlintaGas as the Quality Assurance Engineer on 27 March 1995.  He reported to Mr ter Kuile who was then Manager Engineering and worked from premises in Kewdale.  In December 1995 his manager became Mr Sharma.  In or about March 1998 Mr Lukies was transferred to the Bentley Research Laboratory complex reporting once again to Mr ter Kuile. 

5         On 5 June 1998 Mr Lukies was appointed Senior Technical Services Engineer within the Technical Services Branch.  He was required to undergo a programme of additional training and was then confirmed in that position effective from 5 March 1999. 

6         In May 1999 as a result of a restructure by the respondent, Mr Lukies was transferred to the Victoria Park offices and into the Network Development Branch which had Mr Sharma as manager.  He lost certain responsibilities including accuracy verification testing and assisting the Quality Assurance Engineer. 

7         On 12 June 2000 Mr Lukies entered into an employment agreement which came into effect upon the completion of the sale of the AlintaGas Corporation on 17 October 2000.  The new contract included amongst other things a guarantee of employment “in their current position and their current terms and conditions of employment for a period of two years effective from the date of sale.

8         On 3 August 2000 a revised job description was completed which reflected the duties being carried out by Mr Lukies following a restructure of the division in which he worked which had occurred at some time after April 1999.  That job description is the job description which was valid at the time Mr Lukies resigned.  Mr Lukies’ evidence is that he also performed some additional duties not contained in the job description including third party impact assessment (relocations work); representation on various internal and external committees and teams; review of all AlintaGas inventory materials specifications and co-ordination of the networks part of the due diligence exercised prior to the sale of AlintaGas (exhibit A1 GL85).

9         Mr Lukies’ substantive duties on the basis of time input were taken up with design services (including responsibilities for high pressure pipeline design, commercial metre set design, regulator set design and open access modifications), third party impact assessments, inventory materials specifications, representation on various standards/codes committees and teams, management of the technical services section (including supervising up to four engineers) and associated administrative functions, safety case development and monthly reports. 

10      For the latter half of 2000 Mr Lukies had increased the time he was spending authoring the various sections of the AlintaGas Safety Case.  On 16 January 2001 he received a memo from the Manager Network Development (exhibit A1 GL 67).  The memorandum noted the obligation on AlintaGas to complete and submit a safety case for the network to the Office of Energy for 1 July 2001 under license requirements.  The memorandum stated that this requirement necessitated Mr Lukies to work as the Senior Engineer – Safety Case Project for a period of 4 to 5 months or until the completion.  Mr Lukies was to devote 100% of his time to the Safety Case Project.  For all practical purposes he would no longer be part of the Technical Services Section on a temporary basis and those parts of his duties he would no longer be performing were to be taken over by Mr Solmundson. 

11      Following the sale of AlintaGas on 17 October 2000 a new Board undertook a programme of reassessment and restructure of the organisation which included the replacement of the Chief Executive Officer with Mr Browning.  On 4 May 2001 Mr Lukies wrote to the Chief Executive Officer and indicated a “general intention” to remain with AlintaGas based on the “vision” expressed in Mr Browning’s presentation to staff.  Mr Lukies described his career aspirations and sought feedback on the availability of suitable positions.  In April 2001 Mr van Weel took over the role of acting General Manager.  On 22 May 2001 Mr ter Kuile took over the role of Manager Network Infrastructure Branch. 

12      On 29 May 2001 a meeting occurred with Mr Lukies and Mr ter Kuile, in the presence of Mr Jackson, at the Broken Hill Hotel where Mr ter Kuile revealed a newly proposed organisational structure for his branch.  Mr ter Kuile indicated the position on the chart that would be Mr Lukies’ position.  Mr Lukies told Mr ter Kuile that he considered the role he was being offered as a demotion and that he would not be interested. 

13      Mr Lukies met with Mr ter Kuile, Mr van Weel and Ms von Berg on 1 June 2001.  Mr Lukies presented the group with a letter that reserved all of his rights with regard to his employment agreement and requested that any proposed variations be expressed to him in writing.  In the afternoon of 1 June 2001 Mr ter Kuile held a meeting of all staff of the branch during which he showed an organisational chart to the meeting which contained the new positions of the branch structure however Mr Lukies’ name did not appear on the chart. 

14      On 21 June 2001 Mr Lukies received a letter of offer annexing a draft job description and a proposed Australian Workplace Agreement.  Mr Lukies had previously been shown a draft of this by Mr ter Kuile on 15 June 2001 and had indicated subsequent to 15 June 2001 that he would not be accepting the position he was to be offered.  After considering the letter of offer, Mr Lukies found it “totally unacceptable”. 

15      On about 22 June 2001 Mr Solmundson showed Mr Lukies Mr Solmundson’s new job description and Mr Lukies formed the view that it took on “a large majority” of the responsibilities which he had previously performed in the role of Senior Technical Services Engineer.  On 23 July 2001 Mr Lukies’ solicitors wrote to AlintaGas and confirmed that he rejected the offer of 21 June 2001 on the basis that it was a demotion and therefore unsuitable.  On 26 July 2001, Mr Lukies’ solicitors wrote to the respondent’s solicitors requesting that the respondent remedy the situation and confirm his terms and conditions of employment within 14 days.  On 30 July 2001 the respondent’s solicitors responded stating that the 2001 job description offered was not a regression and wished Mr Lukies to remain in his current position.  On 5 July 2001 the respondent produced a chart called the Network Infrastructure Branch – AlintaGas Networks (exhibit A1 GL115).  It included a photograph of Mr Lukies adjacent to a position. 

16      Mr Lukies meanwhile continued working on the safety case.  He forwarded a final draft of the safety case to Mr ter Kuile on 18 July 2001 and completed and printed out a master copy of the finished safety case document on 20 July 2001.  This was circulated to Mr van Weel for his signature and was signed on 24 July 2001 (with Mr Lukies stating that the entry was backdated to 19 July 2001). 

17      On 25 July 2001 Mr Lukies was requested to write a memo outlining the respondent’s requirements for Design Life Review and MAOP Review.  On 27 July 2001 Mr Lukies met with Mr ter Kuile to authorise the Master Safety Case document.  I find also, from the cross‑examination of Mr Lukies, that during this period he was asked to develop a programme for, and to commence assessment of, the Network’s high pressure pipelines in accordance with AS2885, prepare a HAZOB workshop in relation to an explosion at Mt Lawley, a framework for holistic Risk Management Technical reporting and to review the respondent’s technical standards and design guidelines with a view to decreasing life-cycle costs and unnecessary requirements.  Also, on 6 August 2001 Mr ter Kuile asked Mr Lukies if he would consider representing the respondent on the Dieback Consultative Committee.  Mr Lukies also was requested to sort out the branch filing system. 

18      On 30 July 2001 the respondent’s solicitors wrote to Mr Lukies’ solicitors.  In that letter was a reference that Mr Lukies had previously been unable to manage:

 “the balance between achieving his core functions and the additional tasks to the extent that neither were being satisfactorily undertaken.  We are instructed that your client was counselled numerous times in this aspect of his performance by Mr Sharma with little or no improvement.  The continued failure to improve resulted in his being requested, by Mr Sharma, to devote 100% of his time on what was known as the Safety Case Project.  When it became apparent that your client did not adhere to these verbal requests he was eventually instructed in writing”.

19      The letter also stated further on that the respondent regarded Mr Lukies as “a valuable and valued employee, his skills and the work he is required to do is essential to the running of the respondent’s business, he has all of the core functions of his position to fulfil and that he has a full job load”. 

20      On 6 August 2001 Mr Lukies’ solicitors wrote to the respondent’s solicitors and attempted to refute the allegations of poor performance. 

21      On 15 August 2001 Mr Lukies attended his doctor and was advised to take sick leave until 24 August 2001.  On 23 August 2001 Mr Lukies was contacted by a former colleague who works for a company called Kvaerner Facilities Management and when Mr Lukies explained his position this former colleague asked him to come to the company for a discussion.  Mr Lukies did so that day.  As a result of some four hours of interviews and discussions with various staff that company offered Mr Lukies’ employment to start on 27 August 2001.  On 24 August 2001 Mr Lukies tendered his resignation letter to the respondent and finished his employment that day.  He commenced work with Kvaerner on 27 August 2001. 

Mr Lukies’ submissions

22      Mr Lukies’ submission is that he was employed pursuant to the 3 August 2000 job description.  From 16 January 2001 there was an agreement between him and the respondent that he would be effectively released from his duties to allow him to spend 100% of his time on the safety case which was to take about 5 months.  The safety case was completed on or around 20 July 2001. 

23      The draft job description and organisational chart put to him by Mr ter Kuile was very similar to the job description that applied prior to June 1998 but was inferior in seniority and status and accordingly it represented a significant regression in relation to Mr Lukies’ key accountabilities, budgets and responsibilities.  He submits that the letter of offer distributed on 21 June 2001 constituted a demotion in that he would no longer report directly to a manager and had lost the employees who reported to him.  Those and other changes were what constituted the demotion. 

24      At the time Mr Lukies had completed the safety case, he was not performing any other substantive functions and his “current position” no longer existed.  Clause 4.2 of the respondent’s employment agreement provided that Mr Lukies was guaranteed two years’ employment from the date of sale in his “current position and his current terms and conditions of employment”.  The two year period ran from October 2000.  However, Mr Lukies no longer had any of his core functions left to perform and he submits that his position was redundant.  Since completing the safety case on 23 July 2001 he had not been given any substantive duties to perform.  Rather, he was asked to perform menial tasks.  This constituted a repudiation by the respondent of the contract of employment which Mr Lukies was entitled to accept and he left his position on 24 August 2001. 

25      Mr Lukies points to Clause 30 of the employment agreement which provides that an employee “will be redundant if AlintaGas does not require his or her position to be filled”.  Clause 30.3 (c) provides for the employee’s entitlements in the event of redundancy.  Compensation for early termination would include a pro-rata payment for the remainder of the period of the fixed term contract not employed.  It was submitted that Mr Lukies’ employment was “terminated” as a result of the imposition of the change in duties which amounted to an impermissible variation of his contract resulting in a dismissal from his former position. 

26      Mr Lukies’ submissions on his denied contractual benefits claim is that he was entitled to a benefit of the unexpired portion of his fixed term contract of employment.  It is a legal entitlement and he is not obliged to mitigate that loss.  To consider mitigation in these circumstances would give rise to the most “transparent stratagems of evasion” on the part of the respondent. 

27      Further, he submits that the dismissal was harsh, oppressive and unfair because it followed a unilateral variation to his contract of employment, the offer of a demoted role in circumstances that amounted to a repudiation of his current terms and conditions of employment, the respondent failed to be good and considerate to its employee who was both long serving and faithful thus destroying the requisite relationship of trust and confidence, he was subjected to a humiliating campaign by senior management to force change upon him, he was not consulted about proposed changes to his role and was effectively forced out of the organisation.  Further, he was subjected to personal stress and associated health problems.

The respondent’s submissions

28      The respondent submits that Mr Lukies has been substantively employed in a technical compliance role from the very beginning of his employment by the respondent.  It remained his core role throughout his employment and would have continued to be his core role had he not chosen to resign from his employment to further his personal career ambitions.  His core role has grown in its importance to the respondent and is likely to continue to do so with the consequence that had he not resigned his performance of the work would have further advanced both his professional development and managerial aspirations.  It is the identification of his core role and functions and any change or lack of change in it that must be the key factor in determining the threshold question about whether there was a unilateral variation as Mr Lukies contends. 

29      Further, by virtue of the employment agreement he signed Mr Lukies agreed to perform such work as the respondent shall reasonably require and carry out such duties as were within his skills, competence and training even if they were incidental or peripheral to his substantive function.  The respondent was at all times acting within its contractual rights and Mr Lukies was contractually obliged to perform the duties and functions required of him from the middle of 2001.  There was no demotion of Mr Lukies because he remained employed on the same terms and conditions.  All other changes were a natural consequence of the re-oganisation of the respondent’s business structure and did not derogate from Mr Lukies’ core role nor from the increasing importance of its purpose to the respondent’s business. 

30      The respondent submits that Mr Lukies has not been denied a benefit under his contract because the compensation payable under subclause 4.3 is predicated on termination by the respondent, which did not occur.  Mr Lukies was not made redundant but even if there had been a redundancy the respondent would have been obliged to endeavour to transfer him to another suitable position or in the alternative offer to retrain him to fill an alternative position.  The respondent submits that in the event Mr Lukies is found by the Commission to have been unfairly dismissed or to somehow be entitled to contractual benefits his entitlement can only be to compensation.  The fact that he gained further employment on significantly better terms and conditions of employment within three days of the end of his employment with the respondent should be taken into account in assessing any compensation which would consequently be nominal only. 

The legal position

31      Mr Lukies’ claims, both of unfair dismissal and denied contractual benefits, are based upon his contention that his resignation amounted to a dismissal for the purposes of the Industrial Relations Act 1979.  To put it another way, Mr Lukies does not claim that he is entitled to any benefits under his contract of employment by virtue of his resignation.  Therefore, the initial consideration must be whether or not his resignation can constitute a dismissal for the purposes of the Act.  If it does not, that is the end of his claim in total.  If it does, then the Commission will then consider whether or not that dismissal was unfair and if it was then deal with the remedies for that unfair dismissal.  The Commission will then also deal with his claim for denied contractual benefits.  I therefore turn firstly to consider whether or not Mr Lukies’ resignation constitutes a dismissal for the purposes of the Act. 

32      A resignation can constitute a dismissal for the purposes of the Act but whether or not a particular resignation will do so depends upon the circumstances of each case.  Thus, the resignation of a prison officer who resigned after being persuaded to do so by two internal investigation officers was held to be a dismissal (Attorney General of WA v. Prison Officers’ Union (1995) 75 WAIG 3166; 62 IR 225).  In that matter Kennedy J. held that it was the employer who “really terminated” the contract of service.  Rowland J., with whom Anderson J. agreed, stated that the Industrial Appeal Court has not been called upon to make any definitive decision on whether or not a “constructive dismissal” can fall into the category of an unfair dismissal for the purposes of the Act.  Each case must be looked at on its own facts.  He adopted the approach of the Court of Appeal of New Zealand in Auckland Shop Employees’ Union v. Woolworth’s (NZ) Ltd [1985] 2 NZLR 372.  As that Court observed, in the context of an Act aimed at good industrial relations it is right to assume that Parliament would have meant “dismissal” to cover cases where in substance the employer has dismissed an employee although technically there has been a resignation.  The Court observed that it would be:

 “… undesirable to try to visualise all the kinds of case which the Arbitration Court could properly treat as constructive dismissal, but it is not difficult to list some.  The concept is certainly capable of including cases where an employer gives a worker an option of resigning or being dismissed; or where an employer has followed a course of conduct with the deliberate and dominate purpose of coercing a worker to resign”.

33      The decision of the Industrial Appeal Court therefore does not itself try to visualise all the kinds of case where a resignation will amount to a dismissal for the purposes of the Act.  The circumstances of Mr Lukies’ resignation do not fit the “resign or be dismissed” class of cases.  Neither does Mr Lukies argue that the respondent in this matter has followed a course of conduct with the deliberate a dominate purpose of coercing him to resign.  However, as the decision in Attorney General shows, the concept is wider than those two kinds of cases.

34      The Industrial Relations Commission of South Australia in Lucky “S” Fishing Pty Ltd v. Jex (1997) 75 IR 158 at 164 also considered the decision of the Court of Appeal of New Zealand.  It noted that the Court of Appeal stated that there has been a modification of the test in the Western Excavating (ECC) Ltd v. Sharp case [1978] ICR 221 at 226 which stated that if the employer is guilty of conduct which is a significant breach going to the root of the contract of employment, or which shows that the employer no longer intends to be bound by one or more of the essential terms of the contract, then the employee is entitled to treat himself as discharged from any further performance.  If he does so, then he terminates the contract by reason of the employer’s conduct.  He is constructively dismissed.  The Court of Appeal suggested that in constructive dismissal cases the relevant test is whether the conduct complained of is calculated or likely to seriously damage the relationship of confidence and trust between the parties and is such that the employee cannot be expected to put up with it. 

35      Given the decision of Rowland J. in Attorney General and his reference both to the Industrial Appeal Court’s earlier decision in Cargill Australia Ltd, Lesley Salt Division v. The Federated Clerks’ Union of Australia (1992) 72 WAIG 1495 and the decision of the Court of Appeal of New Zealand, the decision of the Industrial Appeal Court in Cargill that to be a constructive dismissal the employer had to be “guilty of conduct which is a significant breach going to the root of the contract” which entitles the employee to accept the breach and leave appears to have been overtaken by what the Industrial Relations Commission of South Australia referred to as the “wider test”. 

Conclusions

The claim of unfair dismissal

Whether the resignation was a dismissal for the purposes of the Act

36      The onus is upon Mr Lukies to demonstrate that his resignation was a dismissal for the purposes of the Act.  I find the facts that are relevant to that issue are as follows.

37      At the time of his resignation Mr Lukies was employed as a Senior Technical Services Engineer pursuant to a job description dated 3 August 2000.  Although the respondent had offered him a different job description, Mr Lukies did not accept that offer and accordingly remained employed pursuant to the 3 August 2000 job description. 

38      By agreement between Mr Lukies and the respondent arising from the memorandum of 16 January 2001 Mr Lukies was only temporarily relieved of all duties other than for work on the Safety Case in order that he might concentrate upon the Safety Case.  (I say this is by agreement because it was directed by the memorandum from the respondent of that date and Mr Lukies, by his actions from that date, agreed to it.)  It is significant to note that the duration of this agreement was stated in the memorandum to be for “a period of 4-5 months or until the completion” (exhibit A1 GL67).  That is, once the Safety Case Project as described in that memorandum was completed then Mr Lukies would return to being Senior Technical Services Engineer and as the memorandum notes, the duties which Mr Lukies would otherwise have performed which would then be done by Mr Solmundson would only be performed by Mr Solmundson for that period. 

39      From this, it necessarily follows that once that work has been completed, the duties to which Mr Lukies were to be returned were the kind of duties that he was doing prior to the memorandum of 16 January 2001.  That is, whether the work which Mr Lukies was given after he completed the Safety Case was “menial” can be assessed by comparing that work with the kind of work which Mr Lukies performed prior to 16 January 2001.  That work relevantly is work pursuant to his position of Senior Technical Services Engineer in accordance with the 3 August 2000 job description. 

40      Given that Mr Lukies’ evidence is that he signed off on a master copy of the Safety Case on 20 July 2001 and that the internal memorandum envisaged the completion and submission of the Safety Case to the Office of Energy by 1 July 2001 and further that Mr Lukies would work as the Senior Engineer of the Safety Case Project for a period of 4-5 months or until the completion, I find that Mr Lukies had completed the task set out in the internal memorandum of 16 January 2001 on or around 20 July 2001. 

41      Although Mr ter Kuile, and Mr van Weel, both state that the work on the Safety Case is ongoing and that Mr Lukies was the person who would be responsible for that ongoing work, that reference is clearly evidence of the work to be done regarding the Safety Case after it has been completed and submitted to the Office of Energy.  That ongoing work was not within the scope of the internal memorandum of 16 January 2001.  The point to be made is that after approximately 20 July 2001 Mr Lukies was entitled to be given the kind of work which he was performing prior to the memorandum of 16 January 2001.  This would include ongoing work on the Safety Case to the extent that work on the Safety Case was part of his work prior to 16 January 2001.  However, it would not be solely work on the Safety Case for that reason.

42      As a result of the restructure in 2001, the respondent wished to change Mr Lukies’ job description.  The point to be made is that the respondent did not wish to retain Mr Lukies in his current position with its current (as at 3 August 2000) job description notwithstanding the statement to that effect in the respondent’s solicitors’ letter of 30 July 2001.  It is not at this stage necessary to consider whether the offer made to Mr Lukies constituted a promotion or a demotion.  It is merely necessary to note that the respondent wished to change Mr Lukies’ job description as a result of the restructure.

43      Further, although Mr Solmundson had been given those duties which Mr Lukies was no longer to perform whilst Mr Lukies was engaged on the Safety Case Project, there is no evidence that after approximately 20 July 2001 Mr Solmundson reverted to the duties he had been doing prior to the internal memorandum of 16 January 2001.  That, on Mr Solmundson’s evidence (exhibit A2, paragraph 7) was what was originally intended to occur.  Mr Solmundson’s evidence is that Mr Sharma had proposed that Mr Solmundson would take on Mr Lukies’ responsibilities on a part-time basis until approximately the end of June 2001 at which time Mr Lukies would resume in his then current role. 

44      In fact, what occurred was that on 22 June 2001 Mr Solmundson advised Mr Lukies that he, Mr Solmundson, would be assuming a new role as Principal Engineer, Engineering Services which subsumed previous substantive responsibilities of Mr Lukies’ position of Senior Technical Services Engineer.  In other words, the action taken by the respondent in relation to Mr Solmundson’s position in June 2001 meant that the situation envisaged by the respondent in its memorandum of 16 January 2001 had necessarily been overtaken by events such that not only would Mr Solmundson not be returning to Mr Lukies the duties Mr Solmundson had taken over on 16 January 2001, but that he in fact permanently acquired a number of the duties which were part of Mr Lukies’ substantive position. 

45      Thus as at the date of Mr Lukies’ resignation, indeed as at approximately 20 July 2001, Mr Lukies had completed the work on the Safety Case which was required of him by the internal memorandum of 16 January 2001; he was entitled to return to his substantive position and all of its duties and responsibilities but events had overtaken that such that not only had substantive duties of his position been given to Mr Solmundson, but the respondent had indicated it wished to change Mr Lukies’ substantive position to a different position. 

46      I accept that the respondent told Mr Lukies that it wanted Mr Lukies to stay with the organisation.  I also accept that for future work on the Safety Case, the respondent saw Mr Lukies as being the ideal employee to do that work.  Nevertheless, the evidence suggests that the respondent saw Mr Lukies doing only that work and in a different position in the restructured organisation.

47      There is no evidence that following the completion of the master Safety Case document the respondent took any steps to return to Mr Lukies the duties and the responsibilities he had held prior to 16 January 2001. 

48      For those reasons, I conclude that the respondent no longer intended to return Mr Lukies to the duties and responsibilities of Senior Technical Services Engineer in accordance with the August 2001 duty statement.  The fact that his title, salary or work location did not change does not alter that conclusion.

49      The duties which were given to him from 25 July 2001 onwards (writing a memo outlining the respondent’s requirements for Design Life Review and MAOP Review, developing a programme for, and to commence, assessment of the network’s high pressure pipelines, preparing a HAZOB workshop, a framework for holistic Risk Management Technical Reporting and to review the respondent’s technical standards, representing the respondent on the Dieback Consultative Committee and a request to sort out the branch filing system) compare unfavourably with the duties and responsibilities undertaken by Mr Lukies prior to 16 January 2001 for the following reasons. 

50      His evidence of those duties and responsibilities is set out in paragraph 8 above.  This is supplemented by his oral evidence (transcript page 41 onwards) that following the June 1999 restructure he retained the Safety Case and gained responsibility for all detailed design activities (developing and specifying and project managing in the construction of pipelines, gas distribution pipelines, regulator sets, metre sets, cathodic protection and associated equipment) and was also given responsibility for controlling all re-locations work, a number of technical investigation and compliance issues, responsibility for reviewing about 45 technical specifications and was responsible for a broader Technical Services Section.  Approximately 20% of his time was spent on re-location work and about 25% on design, with 25% again being investigations and compliance.  Inventories or technical specifications were only approximately 5%. 

51      In contrast, his evidence at page 46 of the transcript is that from 20 July 2001 he was given filing tasks and requested to write memos but nothing that reflected his earlier job description.  He was asked to investigate the respondent’s risk management philosophy, undertake a MAOP Review and write a memo to the Jarrah Dieback Committee.  He had also been asked to complete the transfer of filing from the old network development branch to the new. 

52      Mr Lukies concedes that if he had continued in employment he would have become responsible for improving and enabling changes to policies, procedures and standards in accordance with the Safety Case and what lies beneath it:  the development of strategy in relation to matters affected by the Safety Case and the preparation of any technical arguments or models or projects affected by the Safety Case.  It is implied that he would also have had some responsibility for ensuring that the respondent’s contractors complied with technical requirements, to monitor the technical regulatory environment, keeping abreast of related legislation and regulations. 

53      I therefore conclude that following the completion of the Safety Case Project as envisaged by the 16 January 2001 internal memorandum, Mr Lukies was not returned to his substantive position.  Indeed, as I have found, the respondent could hardly do so given that the new appointment of Mr Solmundson would mean that Mr Lukies’ position overlapped that of the newly created position occupied by Mr Solmundson.  As Mr ter Kuile admitted, for example,  a substantial part of Mr Lukies’ previous design activities were now with Mr Solmundson and Mr Lukies was not required to make monthly reports because he was no longer a section head and his section no longer existed.

54      I do not lose sight of the fact that the duties which Mr Lukies was asked to perform after July 2001 were duties that the respondent might reasonably require Mr Lukies to perform pursuant to his contract of employment.  However, that does not appear to me to answer the issue as to whether in giving Mr Lukies those duties Mr Lukies was returned to the position as he had left it on 16 January 2001. 

55      Mr Lukies’ argument that this constitutes a repudiation of the contract of employment by the respondent needs to be seen against the other evidence that Mr Lukies was still employed as Senior Technical Services Engineer in accordance with the job description of 3 August 2000; his salary was not reduced and he remained in the same physical work location. 

56      Whether the change which had occurred, that is that upon completion of the Safety Case Project as was required of him by the 16 January 2001 internal memorandum, the respondent did not return him to his previous position and give him the duties he would otherwise have been performing, constituted conduct calculated or likely to seriously damage the relationship of confidence and trust between the parties and as such that the employee cannot be expected to put up with it, is thus a question of balance.  In that regard, I find the evidence in this case of Mr Lukies’ professional qualifications and standing, and the professional nature of his employment renders significant the failure of the respondent to give him the position and duties commensurate with that employment notwithstanding that he retained the title, salary and work location of that position. 

57      I have little difficulty reaching the conclusion that to not provide Mr Lukies with the duties commensurate with the position in accordance with the August 2001 duty statement not only was likely to seriously damage the relationship of confidence and trust between Mr Lukies and the respondent, but on the evidence it did damage that relationship of confidence and trust.  In this regard I accept the evidence of Mr Lukies that he had intended to make his career at AlintaGas such that he responded initially to the proposals of change which came after Mr Browning’s appointment in a most positive manner (see for example exhibit A1 GL 108). 

58      I further find that it was only after Mr Lukies had refused the offer of the new position that his commitment changed:  (exhibit A1, paragraph 143, transcript page 88).  His evidence to that effect is consistent with the e-mails that he had sent in which he promoted himself for future positions within the respondent and it was after that time that Mr Lukies’ thoughts turned to whether or not he would remain with the respondent.  It was not until 31 May and 6 June 2001 that Mr Lukies first sought legal advice in relation to the potential effects upon him of the transitional arrangements, an act quite demonstrative of a breaking down of the working relationship between him and the respondent.

59      Thus, while I am satisfied that the timing of Mr Lukies’ resignation was because he had received an offer of employment from Kvaerner, I also find that the reason why Mr Lukies found the job offer from Kvaerner attractive and resigned was because the respondent had not allocated to him duties of the nature of the duties he was performing prior to the internal memorandum of 16 January 2001 and in doing so broke the relationship of trust and confidence between it and Mr Lukies. 

60      To find as the respondent has submitted, that Mr Lukies chose to resign from his employment only to further his personal career ambitions, is to ignore the history which led to Mr Lukies choosing to resign.  The fact that Mr Lukies was fortunate to find an alternate position in the manner that he did does not alter the focus from considering whether the respondent conducted itself in a manner calculated or likely to seriously damage the relationship of trust and confidence between it and Mr Lukies.  If there had not been the evidence that the respondent did so the respondent’s submission would have had much greater weight. 

61      For the above reasons I conclude that Mr Lukies’ resignation was a dismissal for the purposes of the Act.

Was the dismissal unfair?

62      A constructive dismissal is not necessarily an unfair dismissal even if it is more likely than not to be unfair:  Savoia v. Chiltern Herb Farms Ltd [1982] IRLR 167. 

63      In reaching a conclusion on this issue, I take the following matters into account.  I have already found that it was only after Mr Lukies had refused the offer of the new position that his thoughts of remaining with the respondent changed.  The significance of Mr Lukies’ decision to resign will need to be tested against the offer made to Mr Lukies by the respondent.  Mr Lukies maintains that it was a regression, even a demotion, and it was not reasonable for him to have accepted it.  In placing weight on Mr Lukies’ evidence on this point, I have taken into account that his view is necessarily somewhat subjective.   

64      The respondent, however, states that Mr Lukies has been substantively employed in a technical compliance role from the very beginning of his employment with the respondent and it remained his core role throughout his employment.  The respondent submits that it would have continued to be his core role had he not chosen to resign from his employment to further his personal career ambitions.  Had he not resigned, his performance of that core role would have further advanced both his professional development and managerial aspirations.  Mr ter Kuile’s evidence is that the June 2001 job description offered was not a demotion and simply restated Mr Lukies’ core functions as required after the reorganisation (witness statement at [227] and [315]).  Mr van Weel’s evidence is that the differences between Mr Lukies’ then current job description and the June 2001 job description offered are minor and largely irrelevant.

65      Both Mr Lukies and the respondent brought expert evidence in support of their respective positions.  Mr Lukies called evidence from Mr Les West who is a management consultant and professional engineer.  His statement which became his examination-in-chief (exhibit A3) is that he had been asked to provide his opinion on the contents of the various duties enumerated in the various job descriptions provided to him.  His assessment was that the June 2001 offer made to Mr Lukies represented significantly reduced responsibilities and authorities both in comparison with the August 2000 job description and the earlier job description.  Mr West’s evidence was that this could reasonably have been interpreted by Mr Lukies as representing an impediment to his continued professional engineering foundation. 

66      In cross-examination, Mr West conceded that although he had done what he had been asked to do, there were some limitations in that context.  For example, it was generally true that if one wanted to know what a job actually involved one would go beyond the job description and make observations or direct enquiries of the employee or his managers.  One would not be content to rely just on the job description in order to ascertain what Mr Lukies actually did as a professional engineer.  Mr West’s assessment was whether the job descriptions were different, not whether the jobs were different. 

67      The respondent called evidence from Ms Issko who is a senior consultant with 14 years professional experience in human resource management.  She was requested to review 5 positions within the network division of the respondent.  These included the two positions of senior technical services engineer held by Mr Lukies and the position offered to Mr Lukies in June 2001, together with the position which was advertised and filled subsequent to Mr Lukies’ resignation.  Ms Issko’s evidence is that she applied the Cullen Egan Dell job evaluation methodology to determine the work value of each benchmark position.  This methodology is said by her to provide a systematic and defensible approach to defining jobs in terms of compensable factors such as size, scope, complexity and specific knowledge and experience requirements.  This results in a numerical measure of work value which can then be used as a mechanism to create an appropriate remuneration framework and to examine market remuneration data for jobs of equivalent size for comparative purposes.  A review of each of the senior technical services engineer roles resulted in the work value assessment outcomes for all three position descriptions being the same.  The position of Senior Technical Services Engineer was seen by Ms Issko as being essentially an advisory role providing highly specialised professional advice and service to all levels of the respondent’s business.

68      In cross-examination Ms Issko stated that the task undertaken by her did not require knowledge of the meaning of “design” or “relocations” within the job descriptions for the purposes of the evaluation.  That is, the CED job evaluation methodology is not an assessment from an engineering perspective.  In this regard, Ms Issko differentiated her assessment from Mr West’s assessment.  For example, whilst Mr West placed some stress upon the different delegated financial authorities between the position held by Mr Lukies and the position offered to Mr Lukies, that difference had no effect on the CED methodology which has as its primary purpose the classification of the position and its links to salary banding.  It focuses on the job to be done and not whether it may, for example, represent a demotion for the individual.  Job status is more of an internal assessment by the respondent. 

69      After reviewing all of this evidence, I am quite persuaded that the role offered to Mr Lukies in June 2001 was at least a regression from his then current position.  I have no doubt that the position may have been within a similar classification structure from the point of view of work value.  However, the issue to be assessed by the Commission is whether or not it was reasonable for Mr Lukies to have refused the position offered.  That necessarily requires an assessment not just of the position but Mr Lukies’ circumstances.  I have found particularly persuasive the fact that not only were some substantive duties which were previously part of Mr Lukies’ position given to Mr Solmundson (exhibit A2 [21] and [23, 24]), but also that Mr van Weel, whose duties included implementing the new, and substantial, organisational structure after his appointment, shows that he was under the impression that Mr Lukies’ then current position involved only the preparation of the safety case.  In fact, the evidence shows that Mr Lukies was, in effect, seconded to the safety case on a temporary basis following which not only would he return to his then current position but the duties which Mr Solmundson had picked up from Mr Lukies’ position during that temporary time would be returned to Mr Lukies.  I prefer, for those reasons, the evidence of Mr West that from an engineering view point the position offered to Mr Lukies represented “a step backwards in his career”. 

70      The respondent suggests that the position offered may nevertheless have been suitable in the context of a transfer offered as an alternative to an employee being made redundant.  However, I am not persuaded that the comparison is apposite.  Given my finding that the offer represented a regression for Mr Lukies I would hesitate to hold that the offer was “reasonable”.  Even if the test is whether the position offered could objectively constitute “acceptable alternative employment” as that is referred to in the context of employers seeking relief from an obligation to make redundancy payments (Clothing and Allied Trades Union of Australia v. Hot Tuna Pty Ltd (1988) 27 IR 226) Mr Lukies’ circumstances are a relevant consideration. 

71      However, I am not persuaded that this is an appropriate test in circumstances where the respondent did not present the offer as an alternative to redundancy.  Although from the evidence, the respondent had no intention to returning to Mr Lukies the duties and responsibilities held by him prior to his temporary secondment to the Safety Case, the respondent itself did not take steps to declare his current position redundant and thereupon offer to him the alternatives which may have been available in accordance with his employment agreement.  Indeed, the respondent had indicated in particular that it wished to retain Mr Lukies in its organisation.  I find however, that the respondent’s desire to retain Mr Lukies was on its understanding that he would not be in his then current position but rather in the different position it had created as part of the reorganisation. 

72      The situation in which Mr Lukies found himself, therefore, was not that the respondent was to make him redundant and he was to be offered an alternative position.  Rather, the respondent gave Mr Lukies further but less responsible work in his then current position.  For those reasons, it is not appropriate to assess whether the position offered to Mr Lukies in June 2001 was acceptable alternative employment.  It was simply never presented to him in that context.  For all Mr Lukies knew, the respondent may have had every intention of leaving him in his then current position but with reduced duties or responsibilities.

73      I conclude, for those reasons, that the respondent, having concluded that it no longer wished to retain in its organisational structure the position held by Mr Lukies was obliged, in fairness, to remove that position formally, and to then present Mr Lukies with the options to which he was entitled under his employment agreement.  The fact that the respondent did not do so, and that it merely allocated to Mr Lukies duties not commensurate with the position in fact held by him was unfair to him and thus the respondent’s constructive dismissal of him was unfair.

74      The respondent also submitted that the 16 January 2001 memorandum to Mr Lukies that he work solely on the Safety Case was because of his inability to manage both his core functions and the additional tasks.  The evidence to support that submission is the evidence of both Mr ter Kuile and Mr van Weel both of whom made it clear that they relied for their beliefs upon what they say Mr Sharma had told them.  Mr Sharma was, without explanation, not called to give evidence.  I infer that Mr Sharma’s evidence would not have been of any benefit to the respondent's case. 

75      Mr ter Kuile did say that he had himself spoken to Mr Lukies about performance issues.  However, Mr Lukies’ denial that any such discussions occurred and the unimpeachable evidence that on each and every occasion when either Mr ter Kuile or Mr Sharma gave Mr Lukies a performance appraisal it was “very positive” (transcript p. 197), means that I have little hesitation in accepting Mr Lukies’ evidence that until the respondent’s solicitors’ letter of 30 July 2001 (exhibit A1 GL156) he had never had raised with him by the respondent any suggestion of poor work performance.  In that context, I also have little hesitation in rejecting the submission and the hearsay evidence of Mr ter Kuile and Mr van Weel to the contrary and find that there was no poor performance whatsoever by Mr Lukies in his employment with the respondent.  Further, I express some surprise that the respondent made the submission without producing cogent evidence to support it.

Relief

76      Upon a finding of harsh, oppressive or unfair dismissal the Commission should assess whether or not to reinstate the employee.  I have little difficulty in concluding that reinstatement is not appropriate.  Although the respondent had been prepared to continue with Mr Lukies’ employment, it would not have done so in a manner acceptable to him.  For his part, Mr Lukies has moved on to other employment.  In fact, I find that reinstatement is impracticable. 

77      The Commission is able to award compensation for loss or injury arising from the dismissal and Mr Lukies claims compensation.  The assessment of the compensation to be ordered will necessarily require a finding of the loss or injury.  A proper assessment of Mr Lukies’ loss involves more than one consideration.  One measure of his loss would be the loss of the income he would otherwise have earned, for as long as he was likely to have remained in employment, less the income he either has earned, or ought to have earned had he mitigated his loss by diligently seeking alternative employment.  The respondent sought to rely upon the decision in Bogunovich v Bayside Western Australia Pty Ltd (1998) 79 WAIG 8 to submit that the fact that Mr Lukies gained employment on better terms and conditions within 3 days of the end of his employment with the respondent would mean that compensation would consequently be nominal only. 

78      However, a proper assessment of Mr Lukies’ loss is not only consideration of the loss of the income he would otherwise had earned had he not been dismissed and the structured approach set down in Bogunovich should be seen in relation to the facts which gave rise to it.  The facts in Bogunovich are quite distinguishable from the facts here.  Mr Bogunovich was a manager who was dismissed because the business he was managing was allegedly underperforming ((1998) 78 WAIG 3635).  His employment was not subject to an employment agreement as is the case between Mr Lukies and the respondent.  Had Mr Lukies’ loss been only of the income he would otherwise have earned had he not been dismissed then the submission based upon Bogunovich by the respondent would be relevant.

79      Here, the assessment of loss includes the failure of the respondent to properly declare the position then held by him as redundant and to treat him in accordance with his employment agreement.  While it is true to observe, as Mr Power has observed, that termination of employment as a result of redundancy is treated as a last resort, on the facts before me I find that it is more likely than not that Mr Lukies’ employment would have been terminated for that reason.  Although the respondent may have wanted to retain his employment, and had not previously considered him for redundancy, the only alternative position offered was not one Mr Lukies would have accepted or was obliged to accept.  Further, the evidence is clear that following Mr Lukies’ resignation, the position held by him at the time was not replaced.  Rather, the evidence is that the respondent has advertised for and filled the position of “Principal Engineer – Technical Compliance” which is, on the evidence particularly of Mr West, a different position.  By Clause 30 of the employment agreement, Mr Lukies would be redundant if the respondent did not require his position to be filled.  I regard this as increasing the likelihood that Mr Lukies’ employment would have been terminated by reason of redundancy.  Thus, Mr Lukies’ loss also is the loss of the redundancy payment to which, properly, he would have become entitled had the respondent taken the steps it was required to take (cf. Rogers v. Leighton Contractors (1999) 79 WAIG 3551). 

80      In this case, the redundancy payment is set out in his employment agreement.  It is, in the words submitted by Mr Dixon who appeared for Mr Lukies, a “liquidated amount”.  It is conceded that at common law, such an amount is not subject to the principles of mitigation of loss.  However, and crucially, the purpose for which redundancy payments are made, that is for the loss of non-transferable credits, seniority or status (see the Termination, Change and Redundancy cases (1984) 8 IR 37 at 73) is a relevant consideration.  The statutory imperative on the Commission to decide matters according to equity, good conscience and the substantial merits of the case, must leave room for the Commission to find in the circumstances of the case whether or not the loss for which the employee is to be compensated is to be subject to the common law principle of mitigation.  While there undoubtedly is a general duty upon an employee to mitigate loss (Growers Market Butchers v. Backman (1999) 79 WAIG 1313 at 1316) if by applying that general duty the Commission does not put an unfairly dismissed person who has not been reinstated in the same situation as he or she would have been but for the unfair dismissal then the Commission will act contrary to equity, good conscience, and the substantial merits of the case.

81      In the circumstances of this case, had Mr Lukies been dismissed by the respondent by reason of redundancy he would have received a redundancy payment as an entitlement under his employment agreement even if he had, by his own efforts, found the alternative employment with Kvaerner within 3 days of his termination.  There is no provision in Clause 30 of the employment agreement which suggests otherwise.  I am persuaded that the compensation to be paid to Mr Lukies for the loss of the redundancy payment to which he otherwise would have been entitled is not subject to the principal of mitigation of loss (and see Rogers v. Leighton Contractors, above).  In that way Mr Lukies is put into the same position as he would have been in had he not been (as I find) unfairly dismissed.  Neither is he thereby compensated for loss which he could have avoided (Harcourt Brace & Co v. Cory  (1997) 81 IR 321 at 337) nor does he recover more than he has lost.

82      There is much to be said for the submission of Mr Dixon that to hold that the compensation for the loss of the redundancy entitlement should be subject to mitigation may encourage an employer who wished to avoid paying a redundancy payment to adopt a tactic by which the employee resigns thus allowing the employer to avoid having to pay the redundancy entitlement which otherwise would have been payable.  Whilst that is not the circumstance here, the submission seems to me to support the conclusion in a particular case that to apply some or all of the principles of mitigation may be inappropriate.

83      Finally the proper assessment of Mr Lukies’ loss involves consideration of the submission on the part of Mr Lukies that he is also entitled to compensation for the loss of the balance of the two year guarantee of employment in Clause 4.3 of his employment agreement.  That clause provides that if an employee is terminated by the respondent for any reason other than a valid reason relating to the employee’s capacity or conduct before the period of two years’ guaranteed employment has been completed, the respondent will compensate the employee on a pro-rata basis for the remainder of the period not employed.  The compensation will include any salary the employee would otherwise have earned and the provisions of Clause 30 Redundancy shall apply. 

84      In the circumstances of this case, had Mr Lukies been dismissed by the respondent by reason of redundancy he would have not only received a redundancy payment as an entitlement under his employment agreement but also the compensation for the loss of the balance of the two year guarantee of employment.  The respondent submits that as a matter of construction Clause 4.3 has the effect of confining any payment to compensation.  However, the words “compensate the employee on a pro-rata basis for the remainder of the period not employed” suggests that the compensation is calculated by reference to the remainder of the two-year guarantee period for which the employee is not employed by the respondent.  I therefore reject the respondent’s submission.

85      Rather, the employment agreement would have obliged the respondent to pay Mr Lukies not only the redundancy entitlement but also the salary he would otherwise have earned between the date of the termination of his employment and the expiry date of the two-year guarantee of employment.

86      The employment agreement does not suggest that this payment would not be wholly payable if the employee is successful in finding alternative employment during that term and the respondent does not submit that Mr Lukies is obliged to mitigate his loss (transcript page 270).  Had Clause 4.3 not been agreed to by the respondent when it signed the employment agreement I have no doubt that any loss, or compensation for that loss, based only upon income lost consequent upon an unfair dismissal would be subject to the principles of mitigation.

87      In summary, Mr Lukies’ loss caused by the dismissal is the loss of the redundancy entitlement which he otherwise would have received together with the balance of the two year guarantee of employment. 

88      Given that both those sums would have been payable to Mr Lukies even though he had, through his own efforts, found alternative employment within three days of the termination of his employment, then I consider it fair that Mr Lukies be compensated to the full extent of that loss. 

89      The Commission is also able to order compensation for injury caused by the dismissal.  On the evidence, I am not persuaded that Mr Lukies has discharged the onus upon him to demonstrate that he has suffered injury.  I have had regard to the evidence in his statement on his attending a doctor (exhibit A1 [209] – [211]) however in the context of the evidence as a whole, including that he commenced employment with Kvaerner within two weeks of doing so, I have not found that evidence persuasive.  To the extent that a claim for compensation for injury caused by the dismissal is made, I dismiss it.

The claim of denied contractual benefits

90      Mr Lukies’ claim of denied contractual benefits is to be approached in a different manner.  The onus rests upon Mr Lukies to demonstrate that he has a benefit under his contract of employment to which he is entitled (Perth Finishing College v. Watts (1989) 69 WAIG 2037; Hotcopper Australia Ltd v. Saab (2001) 81 WAIG 2704 at [34]).  In this regard, the fact of his resignation does not create as of right an entitlement under the employment agreement to the compensation for the unexpired portion of the two year guarantee of employment nor to the redundancy payment claimed.  This conclusion does not change upon the finding that Mr Lukies’ resignation constitutes a dismissal for the purposes of s.29(1)(b)(i) of the Act and he is therefore able to refer to the Commission a claim that he was unfairly dismissed.

91      Rather, both those matters are benefits to which Mr Lukies would have been entitled had the respondent in fact terminated his employment by reason of redundancy.  They are, as a consequence, not benefits to which he became entitled upon his resignation but rather they are benefits which he has lost by reason of the manner of the termination of his employment.  As such, they are matters for which compensation is payable, they being loss caused by the dismissal. 

92      The claim for denied contractual benefits is therefore dismissed.

Conclusion

93      For all of the above reasons, the Commission now declares that Mr Lukies was unfairly dismissed by the respondent.  The Commission declares that his reinstatement is impracticable.  The Commission assesses his loss as being the redundancy entitlements, and the balance of the two year guarantee of employment, pursuant to his employment agreement.  The Commission will order compensation for that loss subject to s.23A(4).  The Commission otherwise dismisses Mr Lukies’ claim that he has entitlements pursuant to his contract of employment which have been denied. 

94      The parties are requested to discuss within 7 days the calculation of compensation in accordance with these Reasons for Decision and advise the Commission within that time of those calculations.  The Commission will then prepare and forward to the parties a Minute of the Order to issue.