Thinking | 25 June 2020

Round up | JobKeeper and the Fair Work Commission

By Georgia Macri

Since their introduction, the temporary JobKeeper provisions of the Fair Work Act 2009 (Cth) (FW Act) have been used by eligible employers to assist in managing their workforce during the COVID-19 pandemic.

While the JobKeeper provisions have given employers greater flexibility, particularly with respect to annual leave and directions about how work is performed, there have been a number of disputes lodged with the Fair Work Commission (FWC) in relation to their use. This update highlights some of these disputes and the main takeaways for employers.

Employee eligibility

A number of disputes have been lodged by employees regarding their eligibility for the JobKeeper payment. The FWC has made its position very clear – it does not have the power to deal with disputes about whether an employee is an ‘eligible employee’ for the purposes of the JobKeeper scheme.

JobKeeper enabling stand down direction

A JobKeeper enabling stand down direction given by an employer under the FW Act will be invalid if it is unreasonable in the circumstances.

In W.C. [2020] FWC 2928, the FWC found that where an employer can show that COVID-19 is significantly impacting the employer’s income stream and cashflow, irrespective of the significant financial impact to the employee, a JobKeeper direction to reduce an employee’s hours of work to the equivalent of the JobKeeper minimum is reasonable.

While the reduced working hours may impact the ability to obtain increased revenue, the FWC noted it is not its role to stand in the shoes of the employer unless the employer’s position is clearly untenable.

In this case, when determining that the direction was reasonable, the FWC relied on the employer’s commitment to review the situation each month. Implementing such a review is a prudent step for employers in similar situations.

JobKeeper enabling direction to perform extra hours

In Transport Workers’ Union of Australia Queensland Branch v Prosegur Australia Pty Limited [2020] FWC 3139, the FWC held that a JobKeeper enabling direction – directing all employees to work a minimum 25 hours a week – was not unreasonable, even though the direction would increase the hours of some casual employees.

While the union argued that the direction was unreasonable as it disproportionately affected permanent employees, the FWC rejected this argument on the basis that the hours of permanent employees exceeded those of the casual employees.

In determining that it was not unreasonable to require employees to work extra hours, the FWC commented that if it had been Parliament’s intention to prohibit increasing the hours of employees it would have expressly done so.

How JobKeeper payments are made

Mazzitelli v Qantas [2020] FWC 2685 involved a dispute about whether Qantas JobKeeper payments had complied with the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Rules).

As the relevant employee was paid on a monthly basis, Qantas’s practice was to rely on the JobKeeper payment for the second fortnight of the employee’s monthly pay cycle to cover work that had been performed during the first fortnight.

Although Qantas argued the FWC did not have the power to deal with disputes in respect to how JobKeeper payments were made, the FWC disagreed and held that it did have the power to deal with the dispute.

The FWC provided an opinion that the payments made by Qantas were not made in a reasonable manner, within the meaning of the Rules, and therefore did not meet the wage condition under section 789GD of the FW Act.

The FWC recommended that the JobKeeper payment for a particular fortnight should be allocated to the earnings of that fortnight, irrespective of the employee’s payment cycle.

Annual leave

In McCreedy v Village Roadshow Theme Parks Pty Ltd [2020] FWC 2480 the FWC considered Village Roadshow’s request for an employee to take annual leave, and whether the employee’s refusal to take annual leave was unreasonable.

In considering whether an employee’s refusal was ‘unreasonable’ the FWC clarified that it is not a question of whether an employer has acted reasonably or unreasonably in requesting that an employee to take paid annual leave. Rather, the question to consider is whether the employee has unreasonably refused the request made by their employer.

With reference to the relevant circumstances of the case, including that the employee had no future annual leave booked, she had large annual and long service leave accruals, and all employees had been requested to take annual leave, the FWC held that the employee had unreasonably refused the request made by the employer.

Sick leave while stood down under section 524

While not a decision in respect of the JobKeeper provisions, in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & Ors v Qantas Airways Limited [2020] FCA 656 the Federal Court held that employees cannot access paid personal/carer’s or compassionate leave when they are stood down under section 524 of the FW Act because there is no work for them to be absent from.

Takeaways for employers

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The FWC will not consider disputes relating to an employee’s eligibility to receive the JobKeeper payment.
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A JobKeeper enabling stand down direction will likely be considered reasonable in circumstances where the employer can show that COVID-19 is having a significant financial impact on its business.
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Employees are not prohibited from issuing a JobKeeper enabling direction increasing employee hours of work compared to their ordinary hours of work.
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A JobKeeper payment for a particular fortnight should be allocated to the earnings of that fortnight.
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An employee must not unreasonably refuse an employer’s request to take annual leave. There is no requirement to consider whether the employer has acted reasonably or unreasonably.
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Employees stood down under section 524 of the FW Act have no entitlement to paid personal/carer’s or compassionate leave while stood down.

More information and resources on the impact of COVID-19 on business can be found in our COVID-19 Resource Centre and in our latest thinking on COVID-19. For what your business can do to review its current structure and determine what may need to change, we offer a Turnaround and Corporate Renewal service.

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