Significant decisions re stand down and JobKeeper

26 May 2020

In a busy week for the courts and the Fair Work Commission (FWC), three significant decisions have been handed down related to COVID-19 issues. Brief summaries are set out below:

CEPU v Qantas [2020] FCA 656

This matter concerned whether or not employees were entitled to access paid personal leave during a period in which they have been stood down without pay pursuant to section 524 (s524) of the Fair Work Act 2009 (Cth) (FW Act).

The decision held that personal leave did not apply during a period of stand down. Somewhat surprisingly perhaps, the Federal Court held that even employees who were on personal leave at the time of the stand down could not continue to access that leave once the stand down was implemented.

The Court did say that employees were entitled to access unpaid community service leave, attend for paid jury service and be absent for public holidays without loss of pay during a period of stand down as these absences, according to the Court, fell into a different category to personal leave.

The Court said:

“In circumstances where an employee has been lawfully stood down, and thus in circumstances where there is no work which the employee can perform and thereby derive income, an employee is not entitled to access the leave entitlements conferred by sections 96 or 105.”

Section 96 of the FW Act deals with personal leave and section 105 deals with compassionate leave.

We understand the unions are considering appealing this decision.

Qantas v ALAEA [2020] FCA 682

In this matter, the aircraft engineers’ union had applied to the FWC to arbitrate its contention that Qantas had unlawfully stood down aircraft engineers pursuant to the Qantas (and Jetstar) enterprise agreements. The argument by the union was essentially that there was still some work available for some engineers, and therefore no engineers could be stood down.

Qantas argued that determining the dispute was beyond the jurisdiction of the FWC, and the Federal Court agreed. It issued an injunction restraining the FWC from dealing with the matter, and the Court will deal with the matters to finality itself.

Interestingly, for any employers who have stood down employees pursuant to s524 of the FW Act, the Court said:

“The issues the ALAEA raises also bear on the interpretation of s524(1)(c) of the FW Act, which relevantly provides that “[a]n employer may … stand down an employee during a period in which the employee cannot usefully be employed because of … a stoppage of work for any cause for which the employer cannot reasonably be held responsible”.

As the Court also said:

“It is in the interests of justice that questions of such general and widespread application and importance be determined by a superior court and not left to private arbitration.”

This matter is definitely one that all affected employers need to watch with interest.

McCreedy v Village Roadshow [2020] FWC 2480

In this matter, the FWC was dealing with a dispute over a request by the employer, Village Roadshow, that a part time employee take one day per week of annual leave.

The company was eligible for the JobKeeper wage subsidy and, as a result, the employee, who normally worked two days per week and had been stood down without pay, was receiving double her normal income under the JobKeeper arrangement.

Consistent with its request to all other employees, the company made the request of the employee that she take one day per week of annual leave for the period of the stand down. The employee had approximately 10 weeks of annual leave accrued, and a further nine weeks of long service leave.

As part of the newly introduced JobKeeper amendments to the FW Act, eligible employers can request that employees take annual leave (provided they retain a balance of at least two weeks). The employee must consider the request and not unreasonably refuse.

The Village employee argued she wanted to save the leave for some holidays she had planned over the next 18 months.

Exercising powers only recently given to the FWC, the FWC decided that the employee was being unreasonable in refusing the employer’s request, and issued an order that the employee not continue to refuse the request by the employer.

Message for employers

As with everything else associated with this pandemic, these are interesting times with new legislation and new interpretations of legislation emerging regularly. Given the cost of getting it wrong can be significant, we recommend that if you are intending to rely on the stand down or JobKeeper provisions of the FW Act, you contact us to discuss the benefits, and dangers inherent in the legislation.

Contact us

If you would like advice or assistance with any of the above issues, please contact a member of our Workplace Relations team.

Disclaimer: This publication contains comments of a general nature only and is provided as an information service. It is not intended to be relied upon as, nor is it a substitute for specific professional advice. No responsibility can be accepted by Rigby Cooke Lawyers or the authors for loss occasioned to any person doing anything as a result of any material in this publication.

Liability limited by a scheme approved under Professional Standards Legislation.

©2020 Rigby Cooke Lawyers