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Introduction

This is the first appeal of a decision by the FWC in relation to the new Jobkeeper dispute provisions in the Fair Work Act. This decision also makes some interesting observations on overtime, casual employment and what does “unreasonable” really mean?

Background

The Transport Workers’ Union of Australia (TWU) has lodged an appeal against a decision of Deputy President Sams published on 17 June 2020 1 (decision) concerning a “jobkeeper enabling direction” (direction) issued by Prosegur Australia Pty Limited (Prosegur).

Prosegur is a cash in transit business that performs a combination of armoured car and covert cash transportation operations. The COVID-19 pandemic and its economic effects have caused a serious reduction in Prosegur’s work and revenue.

The gist of the appeal is that the TWU wants preferential treatment provided for full-time employees over that of part-time and casuals. Put another way, instead of Prosegur cutting hours to all employment types (ie full-time, part-time, and casuals), it wanted the axe to fall on part-timers and casuals only.

The Full Bench of the Fair Work Commission firstly allowed the appeal because:

“Because the appeal raises an issue concerning the proper interpretation and application of s 789GK which is new and of general importance, permission to appeal is granted”.

The new provisions

The statutory framework is as follows:

In response to the current COVID-19 epidemic, the FW Act has been amended by the Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020 (Amending Act) to insert a new Part 6-4C, Coronavirus economic response. The object of the Part is set out in s 789GB, which provides:

789GB Object

The object of this Part is to:

(a)  make temporary changes to assist the Australian people to keep their jobs, and maintain their connection to their employers, during the unprecedented economic downturn and work restrictions arising from:

(i)  the COVID-19 pandemic; and

(ii)  government initiatives to slow the transmission of COVID-19; and

(b)  help sustain the viability of Australian businesses during the COVID-19 pandemic, including by preparing the Australian economy to recover with speed and strength after a period of hibernation; and

(c)  continue the employment of employees; and

(d)  ensure the continued effective operation of occupational health and safety laws during the COVID-19 pandemic; and

(e)  help ensure that, where reasonably possible, employees:

(i)  remain productively employed during the COVID-19 pandemic; and

(ii)  continue to contribute to the business of their employer where it is safe and possible for the business to continue operating.

Part 6-4C authorises employers to give “jobkeeper enabling directions” to employees in respect of whom it is entitled to receive the wage subsidies provided for in the Amending Act. Relevant to this matter, s 789GDC(1) provides as follows:

(1)  If:

(a)  after the commencement of this section, an employer of an employee gave the employee a direction (the jobkeeper enabling stand down direction) to:

(i)  not work on a day or days on which the employee would usually work; or

(ii)  work for a lesser period than the period which the employee would ordinarily work on a particular day or days; or

(iii)  work a reduced number of hours (compared with the employee’s ordinary hours of work);

during a period (the jobkeeper enabling stand down period); and

(b)  when the jobkeeper enabling stand down direction was given, the employer qualified for the jobkeeper scheme; and

(c)  the employee cannot be usefully employed for the employee’s normal days or hours during the jobkeeper enabling stand down period because of changes to business attributable to:

(i)  the COVID-19 pandemic; or

(ii)  government initiatives to slow the transmission of COVID-19; and

(d)  the implementation of the jobkeeper enabling stand down direction is safe, having regard to (without limitation) the nature and spread of COVID-19; and

(e)  the employer becomes entitled to one or more jobkeeper payments for the employee:

(i)  for a period that consists of or includes the jobkeeper enabling stand down period; or

(ii)  for periods that, when considered together, consist of or include the jobkeeper enabling stand down period;

the jobkeeper enabling stand down direction is authorised by this section.

The Full Bench explaining that:

“Section 789GG(1) separately requires an employee to consider and not unreasonably refuse a request made by their employer, where the employer qualifies for the jobkeeper scheme in respect of the employee, to make an agreement under s 789GG(2) to perform duties on different days or at different times. Under s 789GG(2), such an agreement must satisfy a number of conditions, including (in s 789GG(2)(d)) that ‘the agreement does not have the effect of reducing the employee’s number of hours of work (compared with the employee’s ordinary hours of work)’.

“Section 789GG(3) provides that “This section has effect despite a designated employment provision”. The expression “designated employment provision” is defined in s 789 to include a provision of the FW Act (other than a provision in Pt 6-4C or mentioned in s 789GZ), a fair work instrument, a contract of employment or a transitional instrument).

“The authorisation of a direction of the type to which s 789GDC(1) is subject to compliance with the payment conditions in ss 789GD, 789GDA and 789GDB. It is not necessary to reproduce these provisions since no issue has been raised concerning Prosegur’s compliance with these obligations. There are also relevant requirements concerning prior consultation (s 789GM) and the form of the direction (s 789GN) about which there is no issue arising in this appeal. The critical requirement for the purpose of this appeal is s 789GK, which provides:

‘789GK Reasonableness

A jobkeeper enabling direction given by an employer to an employee of the employer does not apply to the employee if the direction is unreasonable in all of the circumstances.

‘Note: A direction may be unreasonable depending on the impact of the direction on any caring responsibilities the employee may have’.

“Section 789GV provides that the Commission may deal with a dispute about the operation of Part 6-4C in the following terms:

789GV FWC may deal with a dispute about the operation of this Part

(1) The FWC may deal with a dispute about the operation of this Part.

(2) The FWC may deal with a dispute by arbitration. Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(3) The FWC may deal with a dispute only on application by any of the following:

(a) an employee;

(b) an employer;

(c) an employee organisation;

(d) an employer organisation.

(4) The FWC may make any of the following orders:

(a) an order that the FWC considers desirable to give effect to a jobkeeper enabling direction;

(b) an order setting aside a jobkeeper enabling direction;

(c) an order:

(i) setting aside a jobkeeper enabling direction; and

(ii) substituting a different jobkeeper enabling direction;

(d) any other order that the FWC considers appropriate.

(5) The FWC must not make an order under paragraph (4)(a) or (c) on or after 28 September 2020.

(6) An order made by the FWC under paragraph (4)(a) ceases to have effect at the start of 28 September 2020.

(7) In dealing with the dispute, the FWC must take into account fairness between the parties concerned.

“Section 789GW provides that a person must not contravene a term of an order made by the Commission pursuant to s 789GV”.

Casual employment

In the DP’s decision, reference was made to casual employment:

“…employees can accept offers of casual engagements and that the employer can choose not to make such offers. For the employees, such arrangements can allow the type of flexibility … and for the loss of permanent entitlements is compensated by a 25% loading.

“For the employer, a cohort of casual employees is useful to manage business needs and is necessary to cater for the peaks and troughs of work in a business”.

“Nevertheless, I apprehend the Union’s submission is that the employee’s request to require an employee to work extra hours is unreasonable in accordance with JobKeeper rules, and as the hours of some casual employees have increased, not by consent, then this may not be permitted by these rules. This submission raises a general question as to whether an employer’s request to an employee is unreasonable, if it requires an employee to agree to an increase in their hours of work ‘on different days or at different times’, compared with the employee’s ordinary days or times of work.”

The FB concluding:

“There is no need for any direction to be issued to reduce the ordinary hours of work of casual employees, since casual employees ordinarily do not have any defined number of ordinary hours but are engaged to perform work as required. However it may be accepted that, for long-term regular casual employees, it is reasonable for them to be provided with some guarantee of hours in order to maintain their connection with the workplace and for Prosegur to derive commercial value from the jobkeeper subsidy it is receiving in respect of them…” [My emphasis].

“Unreasonable in all of the circumstances”

The FB rejected the DP’s interpretation of the term “unreasonable in all of the circumstances” and substituted its own meaning:

“In AEU v State of Victoria, the Federal Court of Australia (Bromberg J) considered the meaning of “unreasonable” in s 326(1) of the FW Act. In his consideration, Bromberg J first stated the uncontroversial proposition that what is “unreasonable in the circumstances calls for an evaluative judgment in which competing consideration need to be assessed”, and then said:

‘Relevantly, the Oxford English Dictionary contains the following definitions of “unreasonable:”

  1. Not within the limits of what would be rational or sensible to expect; excessive in amount or degree.

3.a. Of an idea, attitude, action, etc.: not guided by, or based upon, reason, good sense, or sound judgement; illogical.

  1. Inequitable, unfair; unjustifiable. Obs

“Of the three senses of the word “unreasonable” there identified, it is the third (“inequitable, unfair; unjustifiable”) that best captures the use made by s 326(1)(c) of the word “unreasonable”. Beyond that observation, as Stroud’s Judicial Dictionary of Words and Phrases…says in its definition for the word “reasonable” – “it would be unreasonable to expect an exact definition of the word ‘reasonable.’” Whilst the word “unreasonable” is used in various provisions of the FW Act, the context is different to that of s 326(1)(c) and no useful guidance can be drawn from cases where the term has been judicially considered. It is the genesis of the scheme established by Division 2 and the origin of s 326(1)(c) itself that shed greater light on the mischief being addressed and the considerations that are likely to be of greatest relevance in an assessment of whether a deduction is “unreasonable in the circumstances”.

The Full Bench’s observation on the Jobkeeper provisions

“(1) The object of Part 6-4C in s 789GB, which has earlier been set out, balances a number of objectives which pertain to the interests of employers and employees respectively. The employer interests referred to include the sustenance of the viability of businesses and the maintenance of the contribution of employees to their employer’s business. The employee interests include the maintenance of employment and the continuation of productive employment during the pandemic.

(2) The power to make jobkeeper enabling directions in Part 6-4C is an extraordinary one, since it authorises the employer to take action which has the effect of modifying or removing entitlements which the employee has under the FW Act, modern awards, enterprise agreements, or their contract of employment. The most significant restraint placed upon the exercise of this power is that, under s 789GK, a jobkeeper enabling direction will not apply to an employee if the direction is unreasonable in all the circumstances. It is apparent that this provision is directed to the protection of the interests of the employee from unreasonable use of the jobkeeper direction power, and therefore directs attention to the interests of the employee in an assessment of what is unreasonable.

(3) The restraint in s 789GK is that the direction is unreasonable in all of the circumstances. These circumstances necessarily include the relevant circumstances of the employee. (It may be noted, as an aside, that in paragraph [20] of the decision, the Deputy President appears on one view to have regarded “all the circumstances” as referring only “the context of the unparalleled circumstances (COVID-19)”. If the expression was read in this confined way, we would consider this to be a separate instance of error).

(4) The position in the above respect is confirmed by the statutory note to s 789GK, which gives as an example the impact on an employee’s caring responsibilities as rendering a jobkeeper direction unreasonable. That is, this is an example of a way in which the employee’s particular interests may render a jobkeeper direction to be non-applicable to the employee because it is unreasonable”.

Returning to “unreasonable in all the circumstances”

According to the FB:

“The above contextual considerations support a construction of the expression in s 789GK as meaning or at least encompassing a direction that is inequitable, unfair or unjustifiable having regard to the object in s 789GB and the respective circumstances of the employer and the employee. [My emphasis].

The FB commentary on employment

“The assessment of the reasonableness or otherwise of the direction must take into account in a significant way the statutory, award, agreement and contractual entitlements of the employees which are affected by the direction…It can safely be said that the full-time employees have an entitlement to 38 paid ordinary hours per week and that part-time employees have an entitlement to a fixed number of ordinary hours per week which is less than 38…The long-term regular casual employees have no entitlement to a fixed number of ordinary hours, but merely an expectation of ongoing work, and the 25 percent casual loading which they receive compensates, in part, for this lack of guaranteed hours. We consider that the assessment of the reasonableness of the direction must take into account whether the deprivation or reduction of pre-existing entitlements to hours of work disproportionately and unfairly affects one category of employee over another…”

Further stating:

“It is relevant that full-time employees and part-time employees may, depending on the extent of their accruals, have the capacity to access leave entitlements if necessary to supplement their income in the face of reduced hours of work, and full-time employees may also have access to accrued RDOs”.

Overtime payments, stating:

The FB agreed with the DP’s assessment of overtime payments

“…There is (in the absence of a specified enterprise agreement or contractual provision otherwise) no entitlement to overtime, so that a jobkeeper direction is not necessary to reduce overtime hours. Similarly, as earlier stated, a jobkeeper direction is not necessary to reduce the hours that a casual employee might have enjoyed prior to the pandemic”.

TWU proposal “unworkable”

“The alternative direction proposed by the TWU at first instance is plainly unworkable. Prosegur cannot reasonably be expected to operate a system of allocating work which requires them to ensure that every employee is receiving the same proportionate reduction in hours as compared to the position prior to the pandemic and at the same time properly service their clients’ needs. If there is to be any alternative direction, it must be administratively workable and allow Prosegur to conduct its operations efficiently”.

Where to from here?

In upholding the appeal, the FB gave the parties a further chance:

“…to confer having regard to the propositions above as a matter of urgency. Should the dispute not be resolved, the parties may file further written submissions…”

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Introduction

The Fair Work Commission has extended the entitlement to unpaid pandemic leave and annual leave at half pay in 63 awards.

Schedule X (which provides the entitlements) now applies until 30 September 2020.

What is Schedule X?

Schedule X is a temporary schedule in some awards. It gives employees:

  • 2 weeks of unpaid pandemic leave
  • the ability to take twice as much annual leave at half their normal pay if their employer agrees.

The Schedule was added into these awards on 8 April 2020 and has been extended until 30 September 2020.

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Introduction

Read the full decision here.

A kitchen hand at a childcare centre did not meet the criteria for JobKeeper as she was a casual employee who had served the required period of employment to be eligible for the payment.

Intent is not actually

The applicant argued that she had been told by a senior staff member that it was their intention to transfer her (written) casual contract of employment to that of a part-time employee.

Unfortunately for the applicant, the FWC finding that intentions do not make it so, citing that there was no proper process that the employer would normally adopt in enacting such a decision and the fact that there was no change to employees rate of pay, which remained unchanged for the length of the employment (and included the 25% casual loading.

As summed up by the Commission:

“I am not persuaded that [the applicant] was offered part-time employment. The evidence before me (viewed objectively) presents a consistent picture of an intention for [the employer] to offer [the applicant] part-time employment. It is unfortunate that the timing of the COVID-19 pandemic interfered in a likely offer.

“The evidence does not support a finding that [the employer] or any other person changed [the applicant’s] employment status. This view is also supported by the lack of any change to her hourly rate, which should have decreased by 25%, or the provision of a written contract of employment. That [the employer] felt some responsibility for [the applicant’s] predicament does not mean she appointed [the applicant] to a part-time position.

Finding that the applicant was employed as a casual employee throughout her employment to date.

 

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Update

Qantas appeal fails

Decision: https://www.fwc.gov.au/documents/decisionssigned/html/2020fwcfb2628.htm

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.

Introduction

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.

Background

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 (explanatory)

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 Dispute

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.

Jurisdiction

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

If:

(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;

(b) loadings;

(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”.

Conclusion

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”.

 

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Introduction

The Fair Work Commission has published a new Jobkeeper disputes benchbook.

On 9 April 2020, the Fair Work Act 2009 was temporarily amended to introduce a new Part 6-4C to help with the implementation of the JobKeeper payment scheme. Under the new Part 6-4C, the Commission has a role in helping parties resolve some disputes relating to the JobKeeper payment scheme.

The benchbook has been prepared by staff of the Commission to provide information about the Commission’s role in dealing with JobKeeper disputes.

COVID-19 response

The Fair Work Commission’s ongoing focus is to ensure continued service provision to employees, employers, and their representatives during the COVID-19 pandemic.

The FWC has published a statement that sets out how it is responding to the COVID-19 pandemic.

The FWC has introduced measures to limit social interactions, to keep our workforce safe and to ensure the continuity of its services. This includes closing its counters and no longer accepting applications in person or by post.

The Commission has established a dedicated email inbox (COVID19Applications@fwc.gov.au) and workflows to deal with urgent applications related to the COVID-19 pandemic.

Visit the Coronavirus (COVID-19) updates & advice page on our website for information about specific application types and any changes to our operations in response to COVID-19.

To find out more about measures taken to restrict gatherings and non-essential business, and support for businesses, please read the latest Information note – Government responses to COVID-19 pandemic.

 

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The Fair Work Commission’s response to COVID-19

Introduction

The FWC has been quick to act in allowing mutually agreed application by Unions/Employers to provide unprecedented flexibility in with the modern award system.

On 9 April 2020, a six-member Full Bench of the FWC issued a comprehensive Statement outlining proactive steps after following both expert health and economic advice, and set out areas that the FWC will take extraordinary steps to assist employers and employees, including:

  • The varying of modern awards.
  • Unpaid pandemic leave.
  • Annual leave at half-pay.

I predict that this Statement will be on the curriculum of future students of employment law.

This article is from a member of HR@Work

Quick action by the Fair Work Commission

Following an expedited hearing this morning, the Fair Work Commission has now handed down its decision in the Clerks-Private Sector Award, varying employment conditions for 1 million+ clerical workers in response to COVID-19.
These amendments are due to a commendable and unprecedented level of cooperation between the Australian Chamber of Commerce and Industry (ACCI), Ai Group, the Australian Council of Trade Unions and Australian Services Union (with ACCI represented by Australian Business Lawyers & Advisors throughout the process).
To quote from the decision directly: “The measures encompassed in the variation strike an appropriate balance between the provision of additional flexibility and treating affected employees fairly. As Mr Ward, on behalf of ACCI, put it in oral argument during the course of commending the role played by the ASU and ACTU:   ‘ these are times for humility, courage and generosity of spirit.’ In our view these qualities have been amply demonstrated by all of those involved. We commend the parties on the balanced nature of the agreed package.”

Clerks-Private Sector Amendments

The key amendments to the Award, which will be included in a schedule attached to the Award, are outlined below:

Date and Operation

Effective immediately these amendments will operate until 30 June 2020, unless extended.

Operational Flexibility 

This amendment allows employees to be directed to perform all duties that are within the employees skill and competency (even if they are lesser duties) regardless of their classification provided the duties are safe and the employee is qualified to perform them, without the reduction of pay.

Working from Home

These amendments have been broken down to address part-time and casual employees under working from home arrangements:
Spread of hours: Where an employee requests to work from home, and the employer agrees, the spread of hours has been expanded to 6am-11pm Monday-Friday and 7am-12.30pm on Saturday.
Part-time employees: Are required to be rostered for a minimum of two hours working from home and become entitled to overtime rates worked in excess of 38 hours per week, or an average of 38 hours per week on a roster system.

Casual employees: May be engaged for a newly reduced minimum of two hours work when working from home.

Agreed temporary reduction in hours by a majority in the workplace

This allows full-time and part-time employees in a workplace, or part of a workplace, to agree to temporarily reduce ordinary hours for a specified period for the whole workplace or relevant part of it, by a 75% majority vote by employees.  The employees must vote on whether to reduce hours or not, and if there is a union involved in the workplace, they must be informed. Additionally, the FWC must be notified of the vote pursuant to the process outlined in the Schedule to the Award.
The reduction in working hours is limited to a 25% reduction or less.
For example: An employee who is employed for five days per week can have their days of work reduced to four days per week pursuant to this clause. For a part-time employee working four days per week, they could have their days reduced to three days per week.
To illustrate the ‘part of a workplace’, if you have separate arms of your business, for example, office staff vs call centre staff, the employees can vote to reduce hours in office section but not the call centre section.
Where hours are reduced, the employee’s ordinary hourly rate will stay the same. The employee will still continue to accrue entitlements at their ordinary hours of work prior to the agreement to reduce hours.

The amendment does not prevent an employer and an individual employee agreeing to reduce hours or to have an employee move temporarily from full-time to
part-time hours of work, with the corresponding reduction in the weekly wage.

Annual Leave

Employers and employees may agree to the taking of up to twice as much annual leave at a proportionately reduced rate, including during any close-down.
An employer may direct an employee to take any accrued annual leave, by giving at least one week’s notice, or any shorter period as agreed. A direction to take annual leave shall not result in an employee having less than two weeks of accrued annual leave remaining.

Close-down

Where an employee is required to take annual leave during a close-down of operations, or part of its operations, the employer must give at least one week’s notice.
During a close-down, an employee can take all of their annual leave and then will be given leave without pay for the remainder of the shutdown.
Any close-down of operations must not extend beyond 30 June 2020. However, these amendments to the Award do not impact upon the operation of section 524 of the Fair Work Act 2009 where an employee stands down employees for reasons beyond the control of the employer where there is a stoppage of work.

These are temporary amendments to the Clerks – Private Sector Award 2010 in response to the crisis facing Australian business in the wake of the COVID-19 pandemic. 

Greg Reiffel Consulting works exclusively for employers – acting as a powerful advocate in all areas of Workplace/Industrial Relations and Human Resources Management. (Unfair Dismissals are a speciality). My business grows by referrals. I would appreciate it if you would pass my details on to your colleagues, clients or associates who could benefit from my skill set. Defending/Preventing unfair dismissals, policies and procedures, contracts of employment, codes of conduct and more…

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Coronavirus and Australian Workplace Laws

Employers need to manage some key issues including:

  • Identify and control risk to health and safety.
  • Workplace flexibility including isolation leave.
  • Privacy issues.
  • Communication with employees and external stakeholders.
  • Economic downturn and business continuity.
  • Employment and industrial issues.
  • More and more employees in Australia are being encouraged or directed to work from home.

What happens if you cannot meet your contract obligations?

Coronavirus (COVID-19) is having significant economic impacts. For those businesses that are impacted, they may find that their rights and obligations with trade partners are affected by the operation of “force majeure” clauses in contracts or by the law of “frustration”.

Force Majeure

Many contracts contain a force majeure clause. The purpose of a force majeure clause is to excuse parties from their contractual obligations if they are prevented from performing them by reason of the occurrence of a defined event or circumstance. A force majeure clause may trigger a contractual right to terminate the contract. Normally the defined events or circumstances are those that are beyond the reasonable control of the parties. The scope and effect of force majeure clauses depends on what the parties to the contract have agreed to at the time the contract was created. Therefore, each matter must be considered on a case by case basis.

Frustration

The law of frustration applies to all contracts. Frustration operates to bring a contract to an end in circumstances where contractual obligations are impossible to perform, or the nature of the obligations are fundamentally changed by the circumstances. The frustrating circumstances must have arisen after the contract was entered into and through no fault of the parties.

Safe Harbour

A director may be personally liable for a debt incurred by the company if, at the time the debt was incurred, the director suspects the company is insolvent or will become insolvent as a result of incurring the debt. However, directors can seek sanctuary from personal liability under the Safe Harbour regime. The safe harbour defence is aimed at encouraging directors to keep control of their company during times of financial distress and allow them to focus on the needs of the company rather than their potential personal liability.

If your business has been impacted by coronavirus, contact our Commercial Law Senior Associate, Adam Brussaard-Kerr, who will be pleased to offer his assistance.

Changes to court operations

“Family Court of Australia and Federal Circuit Court of Australia prioritise urgent and critical cases and have made immediate and significant changes to court operations.

Due to the nature of family law work, including child related and family violence aspects, urgent and priority trials and contested hearings will remain listed and will be conducted in the safest manner possible.

Non-urgent property only trials may be adjourned for an appropriate period of time, and non-urgent parenting trials will be given similar consideration but this is at the discretion of the Judge.

Trials or hearings that can appropriately be done by telephone will be.

Regional circuits conducted by the Federal Circuit Court (scheduled for the next two months) are under review and some matters may be adjourned or conducted by telephone.

VCAT is closed to the public but are conducting many hearings by phone. find out daily times.

Insurance: are you covered?

 As business owners start to suffer losses as a result of the coronavirus / COVID-19, they may start to wonder whether the insurance they have in place will cover them.

Many business owners are unlikely to be covered for their losses, but this is going to depend on what the insurance contract actually says.

Unfortunately, insurance contracts are often quite complex. They generally comprise several documents, such as a ‘schedule’ or ‘certificate’ of insurance, endorsements or special conditions, and the policy wording / Product Disclosure Statement (PDS). All these documents must be read together. They can be difficult to understand. However, it may be worthwhile taking the time to read over them carefully to determine whether cover is available.

If you would like advice on whether you might be covered under your insurance contract for losses suffered as a result of COVID-19, please contact Cameron Forster (Senior Associate).