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The FWC Commission has published a summary of cases involving disputes relating to the Jobkeeper payment scheme.
About JobKeeper disputes under the Fair Work Act
Temporary JobKeeper provisions have been added to the Fair Work Act. An employer who is entitled to receive JobKeeper payments for an eligible employee can temporarily change some of the employee’s job conditions to help them deal with the economic impact of COVID-19 by:
- giving the employee a JobKeeper direction, or
- requesting the employee make an agreement.
The JobKeeper changes to the Fair Work Act started on 9 April 2020 and end on 28 September 2020.
Some working conditions can be changed by the employer without the employee’s agreement. By giving a JobKeeper direction, an employer can:
- give the employee a temporary full or partial stand down (a JobKeeper enabling stand down)
- temporarily change an employee’s duties or location of work.
The JobKeeper direction can’t be unreasonable and it must be in writing.
An eligible employee that has been given a JobKeeper enabling stand down can also request to engage in secondary employment or training.
Some changes to an employee’s working conditions can only be by agreement between an employer and an employee. JobKeeper agreements can include:
- changing an employee’s working days or times of work
- using an employee’s annual leave in certain circumstances, including at half pay.
An employee must consider the request and cannot unreasonably refuse it.
Mazzitelli v Qantas Airways Limited
This application to deal with a dispute in relation to JobKeeper concerned what the applicant considered to be an incorrect application of the JobKeeper payment rules, and how they applied to monthly paid but stood down employees. The respondent in this matter, Qantas Airways Limited (Qantas), opposed the application and raised jurisdictional issues. An attempt by the Commission to resolve the matter in conference was unsuccessful. Qantas sought a determination of the jurisdictional issues before further conciliation or a hearing on the merits.
The applicant is employed as a Planning and Engagement Manager and paid on a monthly pay cycle. The applicant is an eligible employee for JobKeeper. Due to the impact of COVID-19 on its business, in March 2020 Qantas stood down thousands of employees, including the applicant, who worked until 6 April 2020. 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. The applicant further submitted that he had been underpaid $852.30. The applicant believed that Qantas incorrectly applied the JobKeeper legislation and payment rules. He believed that because he is paid monthly he is disadvantaged compared to those Qantas employees who are paid fortnightly, and who he says received the full $1,500 for the second payment fortnight in April 2020.
Qantas contended it had correctly applied the JobKeeper legislation and payment rules. Qantas claimed that the rules, as administered by the Australian Tax Office, require and permit an employer to apply payments to monthly paid employees across two fortnights, and to apply wages earned (if any) across those fortnights in a reasonable manner. Qantas said that the applicant received $3,000 (gross) in total across the two fortnights in April 2020, including payment for work done plus a JobKeeper top up to this amount.
Qantas submitted three grounds on which it believed the Commission did not have jurisdiction to deal with or determine the dispute, being:
- that the dispute was not a dispute about the operation of Part 6-4C of the Fair Work Act
- that the remedy sought by the applicant would require the exercise of judicial power, and
- that the remedy sought by the applicant was in the nature of an underpayment claim which, according to the Commission’s JobKeeper benchbook, was not within its jurisdiction.
At first instance the Commission found the dispute was a dispute about the operation of Part 6-4C and thereby within the Commission’s jurisdiction. It 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), required the Commission to exercise judicial power. The Commission held that its JobKeeper benchbook correctly identified that the Commission ‘cannot generally assist with claims for underpayment of wages and entitlements, including payments under the JobKeeper scheme’. The Commission noted that this is simply a statement of the legal position that underpayment claims are not within the Commission’s jurisdiction. The JobKeeper benchbook is a guide and its language does not substitute for the law. The Commission rejected the respondent’s jurisdictional challenges. The Commission determined that it had jurisdiction to deal with the dispute as notified and listed the matter for conciliation.
Qantas sought permission to appeal the Commission’s decision at first instance and argued three errors. Qantas claimed that the Commission erred in its characterisation of the subject matter of the dispute; that the Commission did not assess the nature of the power it would exercise were it to arbitrate the dispute; and that in so doing the Commission had denied Qantas procedural fairness.
The Full Bench refused permission to appeal for five reasons. Firstly, the Full Bench found that in the decision under appeal the Commission need only have satisfied itself that the application concerned a dispute about the operation of Part 6-4C; the Commission found that it did, and Qantas did not challenge this finding. Qantas’ objection at first instance was an application for the summary termination of proceedings. The Full Bench found Qantas had not demonstrated at first instance or in its appeal submissions that the application should be summarily terminated as under the relevant criteria set out in Bibawi. The Full Bench found that while the Commission cannot determine whether Qantas complied with s.789GA or s.789GDA in relation to its payments to the respondent by arbitration, the Commission may still exercise its arbitral power under s.789GV(4) to deal with the dispute in another way.
Secondly, the Full Bench found that whilst the Commission is prohibited from the exercise of judicial power, there was no basis to conclude that in arbitrating the dispute the Commission need exercise such power. Thirdly, the Full Bench found Qantas’ characterisation of the dispute somewhat artificial, in that the employee’s application was not a formal pleading but seemed to seek the opinion of the Commission as to certain aspects of Part 6-4C of the Fair Work Act. Fourthly, as the Commission had not yet made any order in the proceedings adverse to Qantas in its position in the dispute, there was no lack of procedural fairness. And fifthly, the appeal concerned an interlocutory decision. The Full Bench held there were strong policy reasons against granting permission to appeal against an interlocutory decision, including that it is crucial disputes arising under Part 6-4C of the Fair Work Act are dealt with by the Commission in an expeditious and efficient manner. For these reasons the Full Bench was not satisfied that granting permission would be in the public interest. Permission to appeal was refused.
The application was returned to the Commission for hearing. The applicant requested the Commission express an opinion on whether the Fair Work Act and JobKeeper Payment Rules were applied correctly. Qantas submitted that it correctly applied the wage condition and minimum payment guarantee in s.789GD and s.789GDA of the Fair Work Act and rule 10 of the JobKeeper Payment Rules. Qantas further submitted that there was no unfairness between monthly and fortnightly paid employees.
The Commission considered that the wage condition in s.789GD provides that the employer must ensure that the wage condition has been satisfied in respect of the employee by end of the fortnight. The Commission did not consider that it was reasonable for Qantas to have used a calculation method that resulted in the applicant being paid a combined total of $3,000.00 during JobKeeper fortnights 1 and 2, where the respondent had secured that amount from the Commonwealth as well as the value of applicant’s labour for those working days in fortnight 1 before he was stood down.
The Commission was of the opinion that the payments made by Qantas were not allocated to JobKeeper fortnight 1 and JobKeeper fortnight 2 in a reasonable manner, and thereby Qantas did not meet the wage condition in s.789GD. The Commission recommended that Qantas reverse its decision to allocate monies earned by the applicant in JobKeeper fortnight 1 to JobKeeper fortnight 2. The Commission also recommended that in future Qantas assesses whether it accrued a benefit from the provision of labour that gave rise to earnings in particular JobKeeper fortnight. The Commission ordered that the applicant and Qantas confer in light of its opinion and recommendations, with a view to resolving the dispute. The Commission made no determination as to whether Qantas complied with s.789GD or s.789GDA of the Fair Work Act, or rule 10(3) of the JobKeeper Payment Rules.
McCreedy v Village Roadshow Theme Parks Pty Ltd
This application to deal with a dispute in relation to JobKeeper considered whether any JobKeeper enabling direction was provided to an employee. The applicant has worked for the respondent Village Roadshow Theme Parks (VRTP) for 22 years. She is currently employed in the Staff Services Department and works 30 hours per fortnight part-time. The applicant is an employee eligible for JobKeeper.
Due to the impact of COVID-19 on its business VRTP stood down a large number of its employees. The applicant was stood down on 23 March 2020. The applicant was issued a JobKeeper enabling direction from VRTP to not attend work. On 29 April 2020, VRTP subsequently issued a letter to the applicant requesting that she take annual leave during the JobKeeper period. VRTP asked the applicant to take one day of annual leave each week until either 27 September 2020, when the coronavirus provisions cease to take effect, or the time when her leave balance was reduced to four days (whichever happened first).
The applicant did not agree with VRTP’s request to reduce her annual leave and considered that she was not being unreasonable in her refusal to agree to the request. The applicant submitted that VRTP’s request impacted long-serving employees with large leave balances more than others. She further submitted that it would be fairer if all employees were required to take the same amount of annual leave, so as not to disadvantage employees with larger leave accruals like herself. The applicant submitted that the JobKeeper legislation should only be available to smaller employers, and not large employers like VRTP. The applicant sent VRTP an ‘annual leave justification’ in relation to her refusal to reduce annual leave as requested. VRTP’s annual leave policy provides all leave must be approved before it is guaranteed. VRTP wrote to the applicant on 1 May 2020 in response to her ‘annual leave justification’ and stated its view that her refusal to take annual leave was unreasonable.
The Commission held that the dispute was a dispute about the operation of Part 6-4C and within the Commission’s jurisdiction. The Commission found that the dispute was not in relation to a JobKeeper enabling direction, but was a dispute about the request made by VRTP that the applicant take annual leave at the rate of one day per week (given her part-time hours of work) without reducing her minimum annual leave balance below four days.
The Commission did not accept the applicant’s submission that VRTP’s annual leave request was unreasonable, or that the JobKeeper legislation should only be available to smaller employers. The Commission found that the applicant’s refusal of VRTP’s request to take annual leave was unreasonable. The Commission issued an order pursuant to s.789GV(4)(d) of the Fair Work Act that the applicant not continue to refuse the request made by VRTP. The order to take effect from 13 May 2020 and end at 11:59:59pm on 27 September 2020.
Appeal by Transport Workers’ Union of Australia against decision of 17 June 2020 [ FWC 3139] Re: Prosegur Australia Pty Limited
At first instance in this matter the Commission found a JobKeeper enabling stand down direction issued by Prosegur pursuant to s.789GDC(1) of the Fair Work Act was not unreasonable. The TWU lodged an appeal against the decision, contending that the decision was in error due to the misconstruction of s.789GK concerning reasonableness, and also involved an error of fact. The TWU submitted that the Commission had:
- failed to analyse the reasonableness of the direction by applying a misconstruction of s.789GK
- given inappropriate weight to number of hours employees had worked prior to the direction taking effect, and
- erred by relying on an hours of work schedule that was inaccurate.
The Full Bench found the Commission had proceeded upon an incorrect construction of the meaning of expression ‘unreasonable in all of the circumstances’. At first instance the Commission used an interpretation of unreasonableness in his review of the JobKeeper enabling direction that resembled a standard of legal unreasonableness or irrationality used in the context of judicial review of administrative action, and excluded notions of unfairness and inequity between employer and employee. The Full Bench considered this approach was in error when regard was had to the statutory context of s.789GK, including the object of Part 6-4C of the Fair Work Act which refers to balancing employer and employee interests, and the purpose of s.789GK to direct attention to the interests of the employee in the context of an employer’s extraordinary power to make JobKeeper enabling directions.
The Full Bench also found that the Commission did not direct himself to the substance of the direction itself but assessed reasonableness by reference to the hours of work schedule. The Full Bench found that this was erroneous because the hours of work schedule was concerned with a period before the direction was issued and was not illustrative of the effect of the direction.
The Full Bench granted permission to appeal and upheld the appeal. The first instance decision was quashed. The parties were directed to confer as a matter of urgency, having regard to the propositions made in the decision. Should the dispute not be resolved it will be re-determined by arbitration by the Full Bench.
Read decision  FWCFB 3655.