In a recent case at Fair Work Commission (FWC) an employee was found to have been unfairly dismissed after she refused to accept changing her remuneration package from $80,000 base salary and a car to $54,000 base and no car.
The background to the case was the manager agreed to move from a head office role to the store managers role on the same remuneration package as the store had not been performing very well.
In a relative short space of time the store’s turnover increased by nearly 20% and it became one of the top six outlets for the retail chain.
Despite this, the company’s director told her that her salary was to be brought into line with other store managers. This meant wanting to change her remuneration package from $80,000 base salary and a car to $54,000 base and no car.
The director informed the manager that if she did not accept the new pay structure, she would have to resign.
A month later, despite the manager repeatedly telling the company director in writing that she would not accept the change or resign position, the director informed her that she had resigned.
As we have stated before , you cant force someone to resign and certainly in these circumstances with such a large reduction in salary with no other option. The FWC found it was not a resignation but a termination, and that it was harsh and unreasonable, so ordered the Employer to pay the manager 14 weeks’ salary as compensation.
As a final note, the FWC stated the retail chain could have avoided unfairly sacking a strongly performing store manager for refusing a substantial pay cut if it had utilised its HR expertise. Yet another example of the importance of a service like HR Central.