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Qantas appeal fails
In Edition 109 of my newsletter I surmised that the parties had “settled” the matter after Qantas failed in its attempt to have a matter relating to the payment of JobKeeper to a monthly paid employee dismissed for wont of jurisdiction.
I was wrong. In fact, Qantas appealed the decision and failed.
Qantas has not only been busy standing down 20,00 employees, fighting unions in the Federal court of Australia over the payment of personal leave, it also has provided further work to its legal team with the JobKeeper payment rules as they apply to monthly paid but stood down employees.
In this matter, as mentioned, the employee argued he had been ripped off by Qantas, with Qantas arguing that the Fair Work Commission did not have the jurisdiction to deal with the matter. The jurisdictional argument was mainly that as the alleged underpayment was a “judicial matter”, in that the Commission is not a court of law and therefore that matter should not be determined by the Fair Work Commission.
Whilst the merits of the case were not determine in this decision, the Commission determined that it did have the power to determine the matter.
JobKeeper is a Commonwealth programme whereby the Commonwealth provides, for a limited period and on account of the economic impact of COVID-19 on the economy, a wage subsidy of $1,500 per fortnight to eligible employers with respect to eligible employees. Eligible employers are required to make fortnightly payments of wages to such employees in at least the sum of $1,500 and after having done so, the Commonwealth reimburses the employer the wage subsidy.
Under the JobKeeper payment rules, the first JobKeeper fortnight is the period during the two weeks from 30 March 2020 to 12 April 2020. The second JobKeeper fortnight is from 13 April 2020 to 26 April 2020.
Legislation giving effect to JobKeeper passed the Commonwealth parliament on 8 April 2020 and received Royal Assent and commenced on 9 April 2020.
The JobKeeper legislation made complementary amendments to the Fair Work Act 2009.
JobKeeper (including eligibility of employers and employees for the programme) is administered by the Australian Taxation Office (ATO).
On 15 April 2020 Qantas made two payments to the applicant:
- $2,352.30 (gross) for work performed in the month of April 2020 (that is, work up to the commencement of the applicant’s stand down on 6 April 2020); and
- $647.70 (gross) as a JobKeeper “top up”.
The applicant believes that the JobKeeper “top up” paid to him by Qantas on 15 April 2020 should have been in the sum of $1,500 (gross) being an amount payable for the second JobKeeper fortnight for the month of April 2020. On that basis he says he has been underpaid $852.30, and that Qantas has incorrectly applied the JobKeeper legislation and the payment rules. He believes that because he is paid monthly, that he is disadvantaged compared to those Qantas employees who are paid fortnightly.
The FWC finding the dispute is about the Employer Payment Obligations in sections 789GD and 789GDA and, to the extent relevant to the application of those provisions, the Payments and Benefits Rules.
Section 789GA summarises what Part 6-4C concerns itself with:
The purpose of this Part is to assist employers who qualify for the JobKeeper scheme to deal with the economic impact of the Coronavirus known as COVID-19.
This Part authorises an employer who qualifies for the JobKeeper scheme to give a JobKeeper enabling stand down direction to an employee (including to reduce hours of work).
This Part authorises an employer who qualifies for the JobKeeper scheme to give a direction to an employee about:
(a) the duties to be performed by the employee; or
(b) the location of the employee’s work.
This Part authorises an employer who qualifies for the JobKeeper scheme and an employee to make an agreement in relation to:
(a) the days or times when the employee is to perform work; or
(b) the employee taking annual leave, including at half pay.
This Part provides that an employer who qualifies for the JobKeeper scheme must consult an employee (or a representative of the employee) before giving a direction.
This Part provides that:
(a) a direction given by an employer who qualifies for the JobKeeper scheme to an employee does not apply to the employee if the direction is unreasonable in all of the circumstances; and
(b) a direction given by an employer who qualifies for the JobKeeper scheme to an employee in relation to the duties to be performed by the employee, or the location of the employee’s work, does not apply to the employee unless the employer reasonably believes the direction is necessary to continue the employment of one or more employees of the employer.
This Part provides for other safeguards relating to directions given by employers who qualify for the JobKeeper scheme, including a rule that this Part will at all times operate subject to listed laws.
This Part provides that the FWC may deal with a dispute about the operation of this Part.
Whilst the primary focus of Part 6-4C is to provide scope for an eligible employer to issue a JobKeeper enabling direction (relating to stand down, duties of employees or location of work) this is not its exclusive focus. The Part also contains provisions unrelated to a JobKeeper enabling direction: for example, agreements between JobKeeper eligible employers and employees over location of work, days or work, annual leave and rights to secondary employment.
Relevantly for the purposes of this matter, those provisions of Part 6-4C unrelated to a JobKeeper enabling direction include Employer Payment Obligations and in particular the wage condition and the minimum payment guarantee under sections 789GD and 789GDA. These sections provide:
“789GD Obligation of employer to satisfy the wage condition
(a) an employer qualifies for the JobKeeper scheme; and
(b) the employer would be entitled to JobKeeper payment for an employee for a fortnight if (among other things) the employer satisfied the wage condition in respect of the employee for the fortnight;
the employer must ensure that the wage condition has been satisfied in respect of the employee by the end of the fortnight.
Note: 1 This section is a civil remedy provision (see Part 4-1).
Note 2: Under the JobKeeper payment rules, a JobKeeper payment is a payment to an employer for a particular employee for a fortnight.
“789GDA Minimum payment guarantee
(1) For the purposes of this Part, the minimum payment guarantee consists of the rule set out in subsection (2).
(2) If a JobKeeper payment is payable to an employer for an employee of the employer for a fortnight, the employer must ensure that the total amount payable to the employee in respect of the fortnight is not less than the greater of the following:
(a) the amount of JobKeeper payment payable to the employer for the employee for the fortnight;
(b) the amounts payable to the employee in relation to the performance of work during the fortnight.
Note 1: This subsection is a civil remedy provision (see Part 4-1).
Note 2: Amounts referred to in this subsection (other than paragraph (a)) include the following, if they become payable in respect of the fortnight:
(a) incentive-based payments and bonuses;
(c) monetary allowances;
(d) overtime or penalty rates;
(e) leave payments.”
The FWC clarifying:
“[The applicant] was not stood down under a JobKeeper enabling standdown (section 789GDC). He was stood down under general stand down provisions available to employers under section 524 of the FW Act. Indeed, at the time [the applicant] was notified of his stand down and at the time his stand down took effect, the JobKeeper programme and legislation had not commenced.
“However, given that sections 789GD and 789GDA are not contingent on an employee having been stood down under a JobKeeper enabling direction, I do not consider either of these factors to be a basis to conclude that [the applicant’s] application is not “a dispute about the operation” of Part 6-4C.
“[The applicant], at the time of making his application an eligible employee and his employer was an eligible employer. He was in receipt of a top up payment by his employer under the JobKeeper scheme. The payment fortnights that are the subject of his dispute are payment fortnights related directly to his employer’s application of the Payments and Benefits Rules and the employer’s obligation under Part 6-4C to meet the wage condition and the minimum wage guarantee”.
The Deputy President concluding:
“For these reasons I conclude that [the applicant’s] dispute is a dispute about the operation of Part 6-4C and thereby within the Commission’s jurisdiction”.
Exercise of judicial power
The DP did not accept the proposition that dealing with the dispute as notified by the applicant and as properly characterised (being a dispute about the wage condition and the minimum payment obligation under Part 6-4C) requires the Commission to exercise judicial power. Citing:
“The exercise of judicial power, which (under the Australian Constitution) is a power reserved for courts (not the Commission) involves the final determination of lawful rights and obligations and orders related thereto. This would include, for example, a determination that an employer is in breach of the law for having underpaid an employee and a consequential order requiring monies to be paid.
“Determinations and orders of this type by the Commission would be an impermissible exercise of judicial power. The Commission’s JobKeeper benchbook correctly identifies that the Commission ‘cannot generally assist with claims for underpayment of wages and entitlements, including payments under the JobKeeper scheme’. This is simply a statement of the legal position that underpayment claims are not within the Commission’s jurisdiction.
“In any event, the JobKeeper Benchbook is a guide and its language does not substitute for the law. The Benchbook makes this clear”.
The matter was then set down for conciliation later that day. Presumably (as there has yet to be a published decision on the matter) it was “settled”.