First JobKeeper disputes decisions by the Fair Work Commission

First JobKeeper disputes decision by the Fair Work Commission

On 13 May 2020, the Fair Work Commission (FWC) published one of the first, of what is bound to be many, rulings in the JobKeeper dispute jurisdiction. In that decision, Commissioner Jennifer Hunt found that a part-time employee who had been stood down and was receiving double her usual wage through the JobKeeper scheme had unreasonably refused a request by her employer to use a day of annual leave per week over a 16-week period.

JobKeeper jurisdiction

On 9 April 2020, the Fair Work Act 2009 (Cth) (FW Act) 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 FWC has a role in helping parties resolve some disputes implementing "JobKeeper enabling directions" or flexibility agreements.

Part 6-4C allows an employer who is entitled to the JobKeeper payment in relation to a particular employee to give a temporary "JobKeeper enabling direction" to that employee, which could be about:

  • reducing the employee's ordinary hours of work
  • the duties to be performed by the employee; or
  • the location of the employee's work

JobKeeper enabling directions temporarily modify employment terms and conditions in the manner specified in the direction but must still comply with various requirements about payment of wages, general protections laws, unlawful termination law, anti-discrimination laws, WHS laws and workers compensation laws. Unfair dismissal laws also still apply.

The new section 789GV of the FW Act provides that the FWC may deal with a dispute about the operation of Part 6-4C by:

  • mediation or conciliation with a FWC Member (helping parties to agree on how to resolve the dispute)
  • a FWC Member making a recommendation; or
  • arbitration by a FWC Member (making a decision and, if necessary, issuing an order) (s789GV(2))

The FWC has power to make any order (s789GV(4)):

  • it considers "desirable" to give effect to a JobKeeper enabling direction
  • setting aside a JobKeeper enabling direction
  • replacing one JobKeeper enabling direction with a different JobKeeper enabling direction; or
  • that it considers appropriate

considering fairness between the parties concerned.

The FWC cannot assist with disputes about whether an employee is eligible to receive a JobKeeper payment or whether an employee is an eligible employee for the purpose of the JobKeeper scheme.

The FWC has already dismissed at least four applications under section 789GV due to a lack of jurisdiction, because all the claims concerned whether a particular employee was an "eligible employee" for the purpose of the JobKeeper scheme.

Part 6-4C applies until 28 September 2020, at which time it is repealed.

Request for employee to take annual leave

If an employer qualifies for the JobKeeper scheme and is entitled to one or more JobKeeper payments for the employee, the employer may ask the employee to take paid annual leave (see sections 789GJ and 789GS). The employer can only make such a request if it will not result in the employee having a balance of paid annual leave of less than two weeks. An employer and an employee may also agree in writing to the employee taking twice as much paid annual leave at half the employee’s rate of pay.

The employee must:

  • consider the request; and
  • not unreasonably refuse the request

No justification to refuse annual leave request: First JobKeeper dispute decision

Leonie McCreedy v Village Roadshow Theme Parks Pty Ltd [2020] FWC 2480

This decision concerned an employee's unreasonable refusal of a request to take annual leave.

On 6 May 2020, Leonie McCreedy applied to the FWC to deal with a JobKeeper dispute under Part 6-4C. Ms McCreedy had been employed by Village Roadshow Theme Parks Pty Ltd (VRTP) for approximately 22 years. At the time of bringing the dispute, Ms McCreedy worked in the Staff Services Department as a part-time employee working 30 hours per fortnight, typically 15 hours over two days per week.

As a result of restrictions on VRTP's ability to operate its theme parks due to the impact of COVID-19, a large number of its employees were stood down from work. Ms McCreedy last attended work on 19 March 2020 and was stood down on 23 March 2020 with VRTP issuing her with a JobKeeper enabling direction not to attend for work.

VRTP also issued a letter to employees, including Ms McCreedy, requesting that all employees with an annual leave balance of greater than 10 working days take 2.5 days per week of annual leave. This arrangement would be in place until either of the following situations occurred: the employee’s annual leave balance is 10 days, or 27 September 2020 is reached. In the case of part-time employees, the annual leave requested of them was half of their ordinary hours, not 2.5 days per week.

Ms McCreedy had approximately 9.3 weeks of accrued annual leave and 8.6 weeks of accrued long service leave. Taking into consideration Ms McCreedy's part-time hours and leave accruals, VRTP requested that Ms McCreedy take one day of annual leave per week until 27 September 2020, or until her leave balance had reduced to four days.

In bringing her application, Ms McCreedy argued that the JobKeeper legislation was not intended to assist VRTP to use annual leave accruals to set off against JobKeeper payments and that the request unfairly targeted employees like her with substantial annual leave accruals.

Ms McCreedy objected to VRTP drawing down on her accrued annual leave to assist it in reducing employees’ leave balances, and in particular, her leave balance. She said that she had planned to use her accrued leave balance for several planned holidays, including a six-week trip to Europe in 2021. She also said that VRTP's request had caused her "a great deal of angst in these already challenging and anxious times".

After receipt of the annual leave request from VRTP, Ms McCreedy provided VRTP with an "annual leave justification" which stated, among other things, that she had planned, pre-booked, and paid for various elements of upcoming holidays.

None of the dates on which Ms McCreedy said that she had scheduled leave had been approved by VRTP before the business shut down on 23 March 2020. VRTP's annual leave policy stated that leave must be approved by a manager before it is guaranteed and that employees should not book anything until they have received approval, and that VRTP was not responsible if holidays have been booked and paid for but leave is subsequently denied.

On 1 May 2020, VRTP wrote to Ms McCreedy in response to her "annual leave justification" stating, among other things, "The senior management team has reviewed your request and unfortunately it has been denied, as it does not meet our guidelines to unreasonably refuse our request to take leave."

The Commissioner held that Part 6-4C allows employers to give certain directions to employees (JobKeeper enabling directions) and make certain requests of them, and also requires the FWC to deal with applications concerning certain JobKeeper disputes.

However, the Commissioner found that the dispute before the FWC was not one of a "JobKeeper enabling direction", and that it was not open to the FWC to deal with the dispute by making orders in relation to a "JobKeeper enabling direction" (that is, pursuant to section s.789GV(4)(a), (b) or (c)).

Rather, it was one as to the request made by VRTP for Ms McCreedy to take annual leave at the rate of one day per week (given her part-time hours of work), without reducing Ms McCreedy’s minimum balance below four days. This being a matter not involving a JobKeeper enabling direction, the Commissioner held that she could make any other order that the FWC considers appropriate (that is, pursuant to 789GV(4)(d)).

The Commissioner said that section 789GJ(1) is the relevant consideration where Ms McCreedy disputed VRTP’s request for her to take annual leave, being, in summary, that an employee must not unreasonably refuse an employer's request for them to take annual leave if the employee qualifies for the JobKeeper scheme.

Was the refusal to take annual leave unreasonable?

Having regard to all material before her, including that:

  • Ms McCreedy was typically paid approximately $375 per week, but was receiving $750 per week during the time she was eligible for JobKeeper payment
  • the VRTP leave policy; and
  • VRTP's leave request

the Commissioner did not accept that the request was unreasonable and found, rather, that Ms McCreedy's refusal of the request was unreasonable. In particular, Commissioner Hunt found:

"Ms McCreedy made incredibly unsympathetic, and in my view, belligerent and unwarranted attacks on VRTP, despite the JobKeeper provisions being available for all eligible employers, small or large…

The test is not…whether VRTP has acted reasonably or unreasonably; it is whether Ms McCreedy has unreasonably refused the request of VRTP…

In all the circumstances, and noting that Ms McCreedy anticipates requiring only four days’ annual leave for her proposed holidays in September and October 2020, I consider that her refusal of VRTP’s request is unreasonable…

I find that her reasons for her refusal lack justification in fact or circumstance. She has had little to no regard to VRTP’s, in my view, reasonable request to relevant employees to assist in reducing VRTP’s annual leave liabilities during a time when it is unable to operate its business for what is now, approximately 7.5 weeks, and into the short-term future. I consider that Ms McCreedy’s rejection of the request has been excessive, and disappointingly vitriolic, when regard is had to the fact that she has paid for some of the proposed holidays without first obtaining formal approval from VRTP. If she had, her holidays would be guaranteed. It is extraordinarily unfair to have her sights set on a lengthy holiday in mid-2021 to be enjoyed largely with paid annual leave, where she could still enjoy such a lengthy holiday in the event long service leave is requested and approved. Her reliance on this particular holiday in mid-2021 is set against the annual leave policy informing employees that leave can only be requested within 12 months."

Commissioner Hunt ordered that Ms McCreedy not continue to refuse the request made by VRTP.

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