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Express law

18 May 2020

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & Ors v Qantas Airways Limited [2020] FCA 656

The Federal Court has held that national system employees that have been stood down under s 524 of the Fair Work Act 2009 (FW Act) are not entitled to take personal/carer’s leave or compassionate leave. Employees stood down under s 524 are generally not entitled to be paid (although it may be possible for an employee to take annual leave and avoid a proposed stand down).

Background

In mid-March 2020 Qantas announced its intention to stand down approximately two-thirds of its 30,000 employees. Some of the employees were stood down under s 524 of the FW Act, and some of the employees were stood down under the terms of 1 of 2 applicable enterprise agreements.

A number of unions brought proceedings in the Federal Court claiming that the stood down employees were entitled to access paid personal/carer’s leave and (paid) compassionate leave entitlements under ss 97 and 105 of the FW Act, or under the terms of the applicable enterprise agreements.

Reasoning of the Federal Court

Justice Flick emphasised the purpose of stand down provisions as being to afford financial relief to employers and held that the stood down employees are not entitled to access personal/carer’s leave and compassionate leave while stood down under s 524.

Drawing on the analysis of the Full Federal Court in Mondelez v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union (AMWU) [2019] FCAFC 138 (Mondelez), his Honour noted that the leave entitlement conferred by s 97 operated as a form of ‘income protection’ to protect employees from loss of earnings when they are unable to attend work, for example, because of illness or injury. His Honour reasoned that, in circumstances where an employee has been lawfully stood down, there is no work which they can perform to generate income. It followed that an employee is not entitled to access the leave entitlements conferred by ss 97 or 105 of the FW Act when they have been stood down.

Justice Flick then addressed s 525(b) of the FW Act, which provides that an employee is taken not to be stood down under s 524 if they are ‘authorised to be absent from his or her employment.’ His Honour held that s 525(b) only applies where an employee is authorised by the provisions of the FW Act themselves to be ‘absent from his or her employment’, as opposed to circumstances where an employee takes ‘leave’. This was so notwithstanding that the taking of personal/carer’s leave was an exercise of an entitlement to be absent from work.

Justice Flick reached similar conclusions in relation to the provisions of the applicable enterprise agreements.

Implications

There is a provision analogous to s 525(b) in relation to jobkeeper enabling stand down directions. Therefore the decision has broad ramifications for employees that have been given a jobkeeper enabling stand down direction because of the COVID-19 pandemic. However, this aspect of the decision is likely to be of limited significance to public sector employers, as jobkeeper enabling stand down directions are not applicable to such employers.

As noted, Justice Flick’s conclusions relied heavily on the reasoning of the Full Federal Court in Mondelez. Relevantly, a challenge to Mondelez will be heard by the High Court later this year.

Text of the decision is available at:   http://classic.austlii.edu.au/au/cases/cth/FCA/2020/656.html

 

For further information please contact:

Brendan Watts
Counsel
T 02 6253 7463
brendan.watts@ags.gov.au

Elen Perdikogiannis
Senior General Counsel
T 02 6253 7462
elen.perdikogiannis@ags.gov.au

Craig Rawson
Senior Executive Lawyer
T 03 9242 1248
craig.rawson@ags.gov.au

Important: The material in Express law is provided to clients as an early, interim view for general information only, and further analysis on the matter may be prepared by AGS. The material should not be relied upon for the purpose of a particular matter. Please contact AGS before any action or decision is taken on the basis of any of the material in this message.