Insights & News

February 12, 2021

In a speech on 10 February 2021, Anthony Albanese MP revealed the Australian Labor Party’s (ALP) latest federal industrial relations policy, dubbed the “Secure Australian Jobs Plan”.

The policy centres around the core concept of “job security”, representing a significant change of tack from the Federal Opposition’s previous “Change the Rules” policy under Bill Shorten which was rejected at the last Federal Election.

In part the “Secure Australian Jobs Plan” provides the ALP’s response to the Coalition Government’s industrial relations omnibus amendment bill, which was introduced to the Commonwealth Parliament late last year. It seeks to cast the Coalition Government reforms as undermining job security but also proposes tighter regulation to entrench permanent employment and generic terms and conditions of employment as the dominant model of workplace engagement in the Australian economy.

A breakdown of the 8 elements of the ALP’s “Secure Australian Jobs Plan” is set out below.

1.     Inserting “job security” into the FW Act

The ALP proposes to legislate the concept of “job security” as a key objective of the Fair Work Act 2009 (Cth) (FW Act). The stated intention of this is that the Fair Work Commission (FW Commission) would be required to explicitly consider “job security” in its decisions.

No further details are offered as to what the definition of “job security” will entail or how much it will clash with management prerogative.

2.     Rights for gig economy workers

The ALP considers that the definition of “employee” is narrow and outdated resulting in workers in the “gig” and “demand” economies being excluded from employment protections.

Mr Albanese identified that these workers are denied award benefits, superannuation, the right to collectively bargain and unfair dismissal protections and are often required to accept below minimum wage rates to perform insecure piece work.

To remedy this, the ALP proposes to pass legislation to ensure more Australian workers have access to employment protections and entitlements.

This legislation would:

• extend the powers of the FW Commission to extend to “employee-like forms of work”; and
• allow the FW Commission to make orders for minimum standards in new forms of work.

3.     Portable entitlements for workers

According to Mr Albanese, the COVID-19 pandemic illustrated the need for casual, contractor and gig workers to access paid personal/carer’s leave.

States such as Victoria and Queensland have recently taken steps to provide paid sick leave entitlements to those workers and establish portable long service leave schemes.

However, the ALP’s proposal is to implement a national approach to portable entitlements for annual leave, sick leave and long service leave for workers in “insecure work”. This would be developed in consultation with state and territory governments.

No further details are provided on how this policy would work in practice but it would likely result in a system where employers contribute to a third party fund which distributes leave entitlements to eligible employees. For many employers this will increase the compliance burden as their leave arrangements operate across two systems.

4.     Casual workers

The ALP claims that 1 in 4 workers are engaged as casual employees and in certain industries, such as hospitality, 80% of the 800,000 person workforce are casual.

To remedy the purported issues of “insecure work” in such industries, the ALP proposes to legislate a test to determine when a worker can be classified as a casual.

However, no details are provided as to the actual content of this test, save for Mr Albanese’s assertion that: “Flexibility must come with security, not at the expense of it. Flexibility must benefit workers as well as employers.”

The ALP does not appear to propose adopting the definition of casual employment from the WorkPac Pty Ltd v Rossato [2020] FCAFC 84 decision. However, the ALP also does not appear to disagree with the approach taken by the Full Court of the Federal Court of Australia in that decision.

5.     Regulating labour hire

It is proposed that labour hire providers should be regulated to uphold the principle of “same job, same pay”. The ALP proposes to enshrine this principle in legislation. This will likely have a significant impact on the future viability of the labour hire industry and employees who work in it.

6.     Limiting consecutive short-term contracts

The ALP would limit the number of consecutive fixed term contracts an employer can offer for the same role to no more than 2 consecutive contracts or for 24 months, whichever comes first.

Once that limit is reached, the employer would be required to offer a permanent position for that role.

This is an interesting reform as genuine fixed term employment contracts are relatively scare in modern workplaces and recent FW Commission decisions have significantly reduced employer reliance on maximum term contracts.

7.     Providing for more secure work in the public sector

The ALP would conduct an audit of employment within the Australian Public Service with a view to promoting more secure employment where temporary forms of work, such as outsourcing, short term contracts or “offshoring” are being used inappropriately.

8.     Prioritising Government contracts for organisations that offer secure work

The ALP would ensure that the Commonwealth Government prioritises bids and tenders from companies and organisations that provide secure work for employees when purchasing or seeking goods and services.

Other ALP policy proposals

Mr Albanese also noted 2 additional ALP policies which did not appear to fit within the 8 elements of the “Secure Australian Jobs Plan”. These include:

• Making the FW Commission the primary body in Australia’s IR system by abolishing the Registered Organisations and the Australian Building and Construction Commissions; and
• Ensure the superannuation guarantee increases from 9.5% to 12% as legislated.

Conclusion

While the stated aims of the ALP’s industrial relations policy clearly target emerging or existing issues in Australia’s industrial relations framework, the speech offers little in the way of detail.

No definitions have been proposed for the key concepts of “job security”, “casual employment” and “employee-like forms of work” under Labor’s plan, nor has the ALP set out how the FW Commission’s powers would be expanded to fulfill the policy objectives.

Depending on how these details are developed, they are likely to limit options for types of workplace engagement that are not traditional permanent employment underpinned by generic terms and conditions. The devil will be in the detail which is yet to be released.

Duncan Fletcher
Partner
+61 8 6381 7050
[email protected]

Oliver Marshall
Lawyer
+61 8 6381 7056
[email protected]

January 22, 2021

A Contentious COVID-19 Vaccine

Almost a year after Australia’s first confirmed case of COVID-19, the nation is well on its way to delivering a vaccine for the novel disease, with approval for the Pfizer vaccine drawing closer, following recommendations from the independent Advisory Committee on Vaccines. With the first doses likely to be rolled out by March 2021, IR Minister Christian Porter will shortly commence discussions with employers and unions about the difficult legal and workplace safety issues surrounding the roll out.

The question front and centre for many is: can and should my business make COVID-19 vaccinations mandatory for all staff (and potentially clients/customers)?

Unfortunately, there’s no clear answer… yet.

Employers currently have the power to direct employees to obtain specific vaccinations, for instance, the influenza vaccine, when the employees operate in “high risk” environments like health, child or aged care. Though, as a result of the pandemic’s latest developments, employers in a broad range of industries now face a great deal of uncertainty when it comes to giving health-related directions in the workplace.

Is a Direction to Vaccinate “Lawful and Reasonable”

Whether an employer chooses to mandate a COVID-19 vaccination for their employees will continue to depend on the unique circumstances of the case, and whether the direction can be deemed “lawful and reasonable”. A vaccination is a physically invasive procedure and hence, a direction for employees to receive the injection must be justifiable, with supporting evidence to show that the vaccination is inherent for the safe performance of an employee’s duties.

Given COVID-19’s high risk of infection and potentially dire outcome, it is likely that a wide range of industry employers will be successful in mandating the vaccine, claiming it as a necessary measure to minimise the risk of transmission in the workplace, consistent with WHS obligations under relevant Work, Health and Safety laws.

This will, however, be subject to genuine medical exemptions, where in such cases, reasonable alternatives may be provided to employees, where possible. As for political, religious or other objections, employers will need to consider the nature of the objection, whether there are any consequences in relation to discrimination laws, and navigate around these. At the end of the day, where there is a genuine work, health and safety reason for the direction, employers will be on strong ground to enforce such directions absent a legitimate basis for refusal.

The Fair Work Commission recently considered mandating vaccinations in Ms Nicole Maree Arnold v Good­start Ear­ly Learn­ing Lim­it­ed T/A Good­start Ear­ly Learn­ing [2020] FWC 6083 . Despite Deputy President Asbury ruling the application as being “out of time”, the Commission offered insight into the way other cases may be determined, commenting at paragraph [30] on the avenues made available by the Respondent for employees who had valid medical grounds for refusing vaccination. The Commission also highlighted the Respondent’s duty of care, observing at paragraph [32] that the mandatory vaccination is “lawful and reasonable” in the context of child-care.

Top Tip: If employees have legitimate, medical grounds to refuse vaccination directions, employers may, where possible, offer reasonable alternatives for workers falling within this category.

Just last week, the Commission touched on the same issue, considering the possibility of a mandated COVID-19 vaccine in Ms Maria Corazon Glover v Ozcare [2021] FWC 231. In paragraph [126], Commissioner Hunt emphasised the importance of an employee’s specific role in determining whether a mandated vaccine is a lawful and reasonable direction. Commissioner Hunt also made clear that despite grounds for refusal being “medical or based on religious grounds” or otherwise, an employee may still face termination should the vaccination be regarded as an “inherent requirement of the role”.

And while it may be difficult to picture, it is entirely possible that employers far beyond the scope of health, child or aged care may require their workers to be vaccinated against COVID-19, given the much more severe health and safety consequences associated with the disease. Commissioner Hunt, in her decision went so far as to consider it foreseeably reasonable that a shopping centre Santa employee be immunised as an inherent requirement of the job.

While it is likely that the courts will be tasked with ironing out the kinks in employer decisions as to lawful and reasonable vaccination directions, there are steps that can be taken in the meantime to prepare for the vaccine rollout in March.

Deciding Whether to Implement Directions

Employers who are deciding whether or not a vaccination mandate should be imposed should consider:

• The type of work being performed;
• Whether that work can be performed remotely;
• The specific situation of employees;
• The advice given by government and medical bodies applicable at the time; and
• Any other relevant circumstances.

Mandating the Vaccine

When implementing a COVID-19 vaccine mandate, employers must place particular emphasis on:

• Maintaining communications – employees must be made aware of why they are required to get the vaccine and alternatives may need to be given to those who have legitimate grounds to refuse or who are unable to comply. Employees must have the chance to ask questions and have their concerns heard. As this is first and foremost a safety issue, consultation is key.
• Clear processes – if an employee conscientiously objects or is unable to comply with the directions, there should be procedures in place to determine available avenues moving forward.
• Flexibility – employees should be given a choice with regard to vaccine suppliers and administrators and a number of opportunities to receive the vaccination.
• Anticipating attitudes – employers must consider all potential circumstances and responses from their employees.
• Transparency – employers should lead by example and provide explanations for why the vaccination is required to uphold WHS obligations.

Christa Lenard
Partner
+61 2 9169 8404
[email protected]

Natasha Elster
Paralegal

January 13, 2021

In December 2020, the Federal Court of Australia handed down, Alexiou v Australia and New Zealand Banking Group Limited [2020] FCA 1777, which was the first decision to consider the whistleblower provisions under Part 9.4AAA of the Corporations Act 2001 (Cth) (Corps Act).

Part 9.4AAA of the Corps Act came into operation on 1 July 2019[1] and introduced greater protections for whistleblowers and broadened the ambit of the national whistleblower regime.

The ‘new’ whistleblower laws expanded the:

• whistleblower definition;
• private sector coverage;
• definition of what constitutes a protected disclosure;
• protections available to eligible whistleblowers; and
• penalty provisions for breaches.

What did this case consider?

The Federal Court was required to determine whether detrimental conduct that occurred prior to the amendments commencing on 1 July 2019, could be subject to the civil penalty provisions of ss 1317AD and 1317AE of the Corps Act. These provisions entitle a person who has made a protected disclosure to seek a civil remedy when ‘detrimental conduct’ has occurred.

The Applicant, Mr Alexiou, relied on s 1644(2) of the Corps Act which states that Part 9.4AAA applies to a disclosure that:

• was made before the commencement time; and
• would have been a disclosure protected by Part 9.4AAA, if the amendments made had been in force at the time the disclosure was made.

The ‘detrimental conduct’ occurred on 1 September 2015 when the Applicant’s employment was terminated. The Applicant asserted that the whistleblower disclosures he made during his employment (all prior to 1 July 2019), could be considered for the purposes of ss 1317AD and 1317AE, allowing him to pursue the whistleblower civil remedies in relation to the termination of his employment.

What did the Court decide?

The Federal Court stated that if the pre-conditions in s 1644(2)(a) and (b) are met then the disclosure is protected by Part 9.4AAA. Once enlivened, it simply means that the civil remedy provisions in ss 1317AD and 1317AE apply ‘to and from’ 1 July 2019 to those protected disclosures. However, there are no provisions in the Corps Act which apply the civil penalty provisions to ‘detrimental conduct’ that occurred prior to 1 July 2019.

The Federal Court found that because the Applicant’s dismissal took place in 2015, the civil penalty provisions could not apply because the detrimental conduct took place before 1 July 2019. This was so, even though the disclosures made prior to 1 July 2019 were protected by Part 9.4AAA.

Key takeaways

So, which came first, the chicken or the egg?

In a nutshell (or eggshell as it were), if a disclosure is made prior to 1 July 2019 that qualifies as a protected disclosure, a civil remedy can only be sought by the person if they suffered the detrimental conduct, the result of that protected disclosure, on or after 1 July 2019.

The key takeaways from this decision are:

• if the person suffered the detrimental conduct prior to 1 July 2019, then regardless of whether they made protected disclosures pre or post-1 July 2019, they cannot seek a civil remedy for those protected disclosures;
• if the person suffered the detrimental conduct on or after 1 July 2019, and if the disclosures are protected, whether made pre or post-1 July 2019, then the person can seek a civil remedy for those protected disclosures.

The decision dealt with a discrete question and did not consider the application of the whistleblower provisions more broadly. There are currently cases before the Federal Courts and therefore, the enigma that is the national whistleblower regime, will continue to develop in 2021.

Alice DeBoos
Managing Partner
+61 2 9169 8444
[email protected]

Shelley Williams
Senior Associate
+61 9169 8412
[email protected]

[1] Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth).

December 9, 2020

Today, the Morrison Government has introduced the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 into the House of Representatives.

Attorney-General and Minister for Industrial Relations, Christian Porter, has been meeting with working groups comprising business and union groups since June 2020 to tackle known problems within the industrial relations system in the broader context of the Covid-19 pandemic.

Although the discussions of the working groups were confidential, and no public consensus was reached, the Bill has been presented as the Government’s considered response to what the stakeholders had to say.

Importantly, what is presented is not a laundry list of employer or union demands, which has characterised most industrial relations reform over the last 20 years.

Instead these are changes that are aimed at providing comfort to employees but also certainty to employers that the Fair Work Act can be used to encourage, rather than undermine job creation in the post-recession environment.

The changes correlate in many respects with the subject areas dealt with by the working groups. We have prepared Fact Sheets for each area which can be accessed here:

• Casual Employees
• Compliance & Enforcement
• Greenfields Agreements
• Enterprise Agreements
• Award Flexibilities

Some of the changes were expected:

• Harsher penalties for wage theft and underpayments.
• A broad right for regular and systematic casual employees to convert to permanent employment balanced against a mechanism to stop double dipping on entitlements.
• Extended nominal terms for greenfield agreements on major projects to give certainty of employment conditions and prevent strike action mid-project.
• The introduction of “Flex up” provisions in certain Awards to allow part time employees to volunteer to work extra hours without creating an overtime burden on their employer.
• An improved Better Off Overall Test for enterprise agreements with a focus on the actual circumstances in the workplace and a relaxing of technical procedural requirements that have clogged enterprise agreement approvals.
• A redefining of the “genuine agreement” requirement by reference to an overall discretionary test of an “informed decision”.

Some of the changes were not expected:

• Extension of Covid-19 flexibility provisions in Awards for a further two years.
• A 21 day time limit on the Fair Work Commission to approve enterprise agreements unless there are “exceptional circumstances”.
• A much tougher test for non-parties and bargaining representatives to intervene to prevent enterprise agreement approval.
• A sunset deadline which will terminate all pre-2009 (so called zombie) enterprise agreements by 1 July 2022.
• Express legislative confirmation that there will not be an enterprise agreement transfer of business between related entities if employment with the new entity is “at the initiative of the employee”.
• A three month cooling off period after nominal expiry before an application to terminate the agreement can be made.
• Permitting a new franchise employer to opt in to an existing enterprise agreement with a vote of only that new franchisee’s employees.

There were also some missed opportunities:

• Preventing strike action while an employee is employed on an individual flexibility agreement.
• More detailed streamlining of Awards to encourage the use of standard terms across the Award system.
• Permitting provisions in Awards exempting employees above certain classifications from the application of nominated Award provisions.
• A shortened timeframe for a circuit breaker greenfield agreement to be made where a union refuses to reach agreement.

Overall the package looks to be a methodical response to the issues facing employees and employers in a post Covid-19 recovery. It remains to be seen what actually becomes law, when passed.

Irrespective, it will present risks and opportunities to employers.

Now is the time to revisit the issues that your workplace faces in each of the areas that have been covered and be ready to consider how your strategy might change once the legislation is finalised.

Duncan Fletcher
Partner
+61 8 6381 7050
[email protected]

Christa Lenard
Partner
+61 2 9169 8404
[email protected]

Steven Amendola
Partner
+61 3 9958 9606
[email protected]

December 4, 2020

In an important development for expecting parents and their employers, Parliament has passed legislation extending unpaid parental leave entitlements to parents of stillborn children or those who die during the first 24 months of life. The changes provide parents who would otherwise have been entitled to unpaid parental leave, with the same amount of parental leave in the event of a stillbirth. Changes to the requirements for how and when parental leave can be taken, and to the interaction between the NES and the government-funded Paid Parental Leave (PPL) scheme have also come into effect. Here’s what you need to know.

Leave entitlements for parents of a stillborn child or child who dies during their first 24 months

The legislative changes replace the previous s 77A of the Fair Work Act 2009 (Cth) (FW Act) that allowed an employer to cancel planned parental leave in the event of a stillbirth and direct the employee back to work with 6 weeks’ notice. The new s 77A provides those employees with an entitlement to 12 months’ unpaid parental leave and extinguishes the right for the employer to cancel that leave. The employee can still cancel planned parental leave and can return to the workplace with at least 4 weeks’ notice to the employer. The FW Act now defines a stillborn child as one whose gestation period was at least 20 weeks or who weighs at least 400 grams at delivery.

The relevant evidence requirements have also been amended to ensure that employers can require evidence that would satisfy a reasonable person that the new provisions regarding stillbirth or death of a child apply in the case of the relevant employee.

Employees on unpaid parental leave were also previously unable to access compassionate leave. They are now eligible to access 2 days paid compassionate leave in the event of a stillbirth of a child.

Permitted breaks in unpaid parental leave

As a general rule, employees are required to take unpaid parental leave in one block and not return to the workplace, apart from for the purpose of keeping in touch days, until they intend to do so permanently. In practice, this means that once an employee goes on parental leave, if their baby is born prematurely or requires hospitalisation, they can’t return to work even for a short period and then recommence unpaid parental leave once their baby is discharged. Whilst some employees in this situation may choose not to return to work during the period of hospitalisation, the result may be less time at home with their child after they are discharged.

The changes to the FW Act now provide for a new exception to that rule. The new s 78A provides that where a child is required to remain in hospital or is hospitalised immediately after birth, an employee who has given notice of taking unpaid parental leave, will have the option to return to the workplace while the child remains in hospital without breaking the continuity of their parental leave. This is to be known as a permitted work period. The end date of the unpaid parental leave can then be extended by the duration of the permitted work period.

Only one permitted work period will be allowed during unpaid parental leave, and the employer can require medical evidence of both the circumstances giving rise to the applicability of the section and of the employee’s fitness for work during the permitted work period.

The NES and PPL scheme

Finally, recent changes to the Paid Parental Leave Act 2010 (Cth) on 1 July 2020 mean that employees receiving the 18 weeks’ paid parental leave under that scheme can how take 12 weeks’ paid leave in one block and the remaining 6 weeks’ at any time within 24 months of the birth or adoption of the child. This could also be at a time after the employee returns to work. Whilst this flexibility has been introduced in respect of the PPL scheme, it has not previously been reflected in the unpaid entitlement under the NES. This meant that where an employee wished to access the PPL scheme after the first 12 months of unpaid leave, they were required to negotiate this time off with their employer, because the NES previously required that once an employee returns to work they would forfeit the remaining unpaid leave entitlement.

A new s 72A in the NES now mirrors the flexibility in the PPL scheme allowing employees to take up to 6 weeks of their unpaid parental leave at any time in the first 24 months after the birth of the child, even after a return to work. The period of unpaid leave being taken ‘flexibly’ or separately from the initial block of leave, can be taken in separate periods as short as a single day at a time. Employees wishing to use part of their unpaid parental leave flexibly will need to advise their employer of this when giving notice of their intention to take unpaid parental leave, unless the employer agrees to receive the notice at a later date.

Tips for employers

Employers should consider whether their parental leave policies require any amendment to reflect the above changes. In particular, query if exceptions to the requirement to take parental leave in a single block should be set out in your policy.

If you are in any doubt as to how these changes may affect your business, contact us at Kingston Reid to discuss.

Katie Sweatman
Partner
+61 3 9958 9605
[email protected]

Bronte Richardson
Lawyer
+61 2 9169 8418
[email protected]

November 12, 2020

A Full Bench of the Fair Work Commission recently issued its final determination in the 4 yearly review of modern awards – overtime for casuals.

While historically it may have been considered antithetical that overtime loadings could be payable to casual employees who, by their definition, perform ad hoc and flexible hours of work, an ambiguity around whether casual employees were entitled to overtime loadings, and if so, how those overtime loadings should be calculated, was identified during the Commission’s first and final four-yearly modern award review.

As a consequence, the Commission determined to consider the question of overtime for casual employees as a common matter. In July 2020, the Commission issued its proposed determinations for resolving ambiguities around overtime for casual employees, and at the end of October, it issued its final determinations for the variation of 96 modern awards to clarify casual employee entitlements to overtime loadings.

Following this decision, as of 20 November 2020, overtime for casual employees under these 96 modern awards will need to be calculated either:

• in substitution for casual loading;
• in addition to casual loading (cumulative approach); or
• in addition to the sum of an employee’s minimum hourly rate plus casual loading (compounding approach).

The result under a number of these modern awards that casual employees’ overtime loadings should be calculated inclusive of casual loading (the compounding approach), has left some employers scratching their heads.

The Full Bench pointed to two previous decisions, to conclude that the meaning of the award expressions “time and a half”, “double time” and “double time and a half” referred to an employee’s ordinary time rate of pay. Applying the “compounding approach”, the Full Bench found that casual loading forms part of a casual employee’s ordinary rate of pay, unless the definition in that modern award of “hourly ordinary time rate” explicitly excludes casual loading.

Kingston Reid is currently discussing with impacted clients the possibility of seeking judicial review of the Commission’s decision to the Federal Court but for now the decision stands, as the Full Bench has made clear that no further submissions will be accepted in respect to any of the determinations. Modern award covered employers should consider the determination that will operate in respect to the modern award that covers them and ensure that it is well understood when casual employees may become entitled to overtime, and how that overtime loading is to be calculated.

The terms of each modern award do vary, however the entitlement to an overtime loading typically arises where:

• an employee works in excess of 38 hours per week; or
• an employee performs work outside the spread of hours prescribed under the applicable modern award.

Employers who engage casual employees under an enterprise agreement do not need to make any immediate change to overtime payments for those casuals, while the current enterprise agreement continues to apply. However, on entering into bargaining for any future enterprise agreements, employers will need to review their overtime calculation methods, to ensure that their casual employees are still Better Off Overall where the cumulative or compounding calculation methods of overtime calculation would otherwise apply under the applicable modern award.

If you are in any doubt as to how this decision may affect your business, contact us at Kingston Reid to discuss.

Katie Sweatman
Partner
+61 3 9958 9605
[email protected]

Aimee Ford
Lawyer
+61 3 9958 9610
[email protected]

September 1, 2020

In late March 2020, extraordinary measures were put in place to address the impacts of restrictions put in place to manage the spread of COVID-19. In addition to the JobKeeper payment scheme, flexibilities were introduced into the Fair Work Act 2009 (FW Act) for JobKeeper eligible employers to support employers to keep employees on their books.

The Federal Government has passed a Bill to amend the FW Act to extend and amend the JobKeeper provisions. The effect of these amendments are that, following 28 September 2020, two categories of employers will be created:

• Qualifying employers – being those employers who are eligible for JobKeeper payments after
  28 September; and
• Legacy employers – being employers who received one or more JobKeeper payments prior to
  28 September, but no longer qualify for a payment after 28 September.

Qualifying employers will retain access to the full range of flexibility measures, whereas legacy employers will only have access to modified flexibilities, and only where they have a certificate from an eligible financial service provider (tax agent or qualified accountant) stating that the employer has experienced a 10% decline in turnover (unless they are an exempt small business).

JobKeeper 2.0 flexibilities under the FW Act will sunset on 29 March 2021.

What will change?

The key change introduced by the amending legislation relates to the capacity of legacy employers to issue JobKeeper enabling stand down directions.

Legacy employers may only issue a JobKeeper enabling stand down direction to reduce an employee’s hours of work:

• Where they hold a 10% decline in turnover certificate (unless they are an exempt small business, which may instead give a statutory declaration in the prescribed form);
• Where 7 days’ (up from 3 days’) notice is given prior to the implementation of the JobKeeper enabling standing stand direction, and enhanced consultation requirements are followed (see below);
• Where they otherwise comply with the procedural requirements to issue such a direction;
• Where the direction will not result in the employee working less than 60% of the ordinary hours that they worked at 1 March 2020; and
• Where the direction will not result in the employee working less than 2 hours on any day.

Qualifying employers may continue to issue a JobKeeper enabling stand down direction to reduce an employee’s hours by any amount, including to no hours at all, provided that they comply with the procedural requirements to issue such a direction.

Legacy employers seeking to issue a JobKeeper enabling stand down direction will be subject to enhanced consultation obligations requiring:

• Recognition of the employee’s chosen representative, if they choose one;
• Provision of information to the employee and their representative (if any) about the nature of the direction, when the direction takes effect, and the expected effects of the direction;
• Inviting the employee and their representative (if any) to give their views about the proposed direction;
• Giving prompt and genuine consideration to any views expressed by the employee and their representative (if any) within the 7 day period.

What will stay the same?

Save for the additional consultation requirement for legacy employers, most of the procedural aspects of the JobKeeper flexibilities remain the same, notably:

• The requirement to consult about proposed directions;
• The requirement to comply with JobKeeper payment obligations;
• The right for employees subject to reduced hours under a JobKeeper stand down direction to engage in reasonable secondary employment or to engage in training or development;
• The requirement to recognise pre-stand down hours for the purposes of service based entitlements such as the accrual of annual leave or personal leave;
• The Fair Work Commission’s scope to resolve disputes;
• The requirement to pay employees the greater of their JobKeeper payment or the wages earned by them in the relevant period.

Qualifying employers and legacy employers will also retain the scope to give reasonable directions to employees around duties and location of work (including working from home).

What will stop?

The additional scope to request employees to take annual leave or to agree to take annual leave at half pay will come to an end on 28 September 2020, as originally planned, for both qualifying employers and legacy employers.

Employers may still direct employees to take excessive annual leave where pockets of excessive leave continue to exist, and employers and employees may continue to reach agreements for the taking of annual leave with half pay where the applicable industrial instrument provides scope to do so.

Will I need to issue new JobKeeper enabling stand down directions?

Qualifying employers will not need to issue new JobKeeper enabling stand down directions where their eligibility for JobKeeper payments is continuing beyond 28 September 2020. Agreements reached with employees about changing the days and times of their work will also carry over.

Any current JobKeeper enabling stand down direction previously issued by an employer that is not a qualifying employer will automatically cease to have effect on and from 28 September 2020. Affected employers who will become legacy employers will accordingly need to issue a new JobKeeper enabling stand down direction under the new laws.

What do I need to do between now and the end of September?

Employers who will not be qualifying employers after 28 September 2020, but may fit the definition of a legacy employer under the amendments should speak with their accountant (or other eligible financial service provider) about being issued with a 10% decline in turnover certificate.

Small business employers (as defined under the FW Act) may, instead of a certificate provided by an eligible financial service provider, have an individual with knowledge of the employer’s financial affairs make a statutory declaration that the 10% decline in turnover test is satisfied.

What is the relevant period for the 10% decline in turnover test for prospective legacy employers?

An employer will satisfy the decline in turnover test at a particular time where there is a 10% decline in current (not projected) GST turnover:

• If the test time is prior to 28 October 2020 – during the quarter ending 30 June 2020;
• If the test time falls from 28 October 2020 to 27 February 2021 inclusive – during the quarter ending 30 September 2020; or
• If the test time is on or after 28 February 2021 – during the quarter ending 31 December 2020.

A new certificate must be obtained in each quarter. If the employer does not continue to meet the 10% decline in turnover test in any given quarter, any JobKeeper enabling stand down directions will automatically cease at the end of that quarter, unless withdrawn or revoked prior.

Is there anything else we should be thinking about?

Employers who may still have employees stood down pursuant to section 524 of the FW Act should seek advice regarding whether those stand downs continue to be valid. The Fair Work Commission has now considered a number of disputes under the “ordinary” stand down provisions of the FW Act.

Employers who have some, but not full capacity, for employees to return to work should consider implementing JobKeeper enabling stand down directions where available. Where such directions are not available due to eligibility considerations, please contact us to discuss your options.

Katie Sweatman
Partner
+61 3 9958 9605
[email protected]

August 13, 2020

Keep calm and carry on accruing paid personal leave based on ordinary fortnightly hours…

Employers can breathe a heavy sigh of relief!

The High Court has, this morning, handed down its much anticipated decision in the Mondelez v AMWU & Ors case.

By a majority (4:1), the Court has overturned last year’s Full Federal Court majority decision which found that section 96 of the Fair Work Act 2009 (Cth) entitles all employees (except casuals), regardless of their weekly hours of work, to 10 days of paid personal leave per year, with a “day” being the portion of a calendar day that would be allotted to working. The High Court majority found that such an interpretation “would give rise to absurd results and inequitable outcomes, and would be contrary to the legislative purposes of fairness and flexibility in the Fair Work Act”.

Today’s decision confirms that a ‘day’ is a “notional day consisting of one-tenth of the equivalent of an employee’s ordinary hours of work in a two-week period” for the purposes of accruing and taking paid personal leave under the Act.

Key Arguments

The key arguments advanced by Mondelez in support of its ‘average day’ construction of the word ‘day’ were that:

• It means that the leave entitlement is effectively converted into hours based on an employee’s ordinary hours of work over a week, regardless of how those hours are distributed throughout the week. For example, an employee who works 36 hours per week will have worked, across a standard five-day working week, 7.2 hours per day on average. Over the course of the year, that employee will accrue 72 hours personal leave, irrespective of the number of days over which that employee’s hours are worked.
• It ensures that leave accrual for part time employees achieves the expected results. For example, a part time worker who works half the weekly hours worked by a full time colleague accrues half the amount of personal leave that the full time employee accrues.
• Interpreting a ‘day’ based on a ‘calendar day’ or ‘24-hour period’ (as the Full Federal Court majority did), produces varied results as to the accrual of personal leave. For example, an employee who works 36 ordinary hours per week at 7.2 hours per day would accrue 72 hours of personal leave per year. Comparatively, if the 36 hours were compressed into 3 x 12-hour shifts, that employee would be entitled to 120 hours of personal leave per year.
• For employees who work different hours on different days, their ‘day’ will vary depending on the day that the leave is taken.

Ultimately, the High Court majority accepted these arguments and rejected the working day construction, finding that such a construction would lead to inequalities amongst employees with different work patterns, resulting in unfair outcomes.

In particular the majority noted that an employee whose hours are spread over fewer days but with longer shifts would accrue more paid personal leave than an employee working the same number of hours throughout the week, with shorter shifts, spread over more days.

The majority also noted that the “working day” construction would discourage employers from employing anyone other than on a five-day working week basis, which would not be consistent with assisting employees to balance their work and family responsibilities.

Upshot

As envisaged in our ‘Looking Ahead – 2020 Insight’ published earlier this year, the High Court has provided employers with certainty as to how paid personal leave is accrued and taken under the Act.

As the decision aligns with the approach that has been adopted by the vast majority of employers since the introduction of the Act, it avoids the prospect of large scale underpayment claims being made by employees seeking to recoup additional payments for personal leave taken in recent years.

Dominic Fleeton
Partner
+61 3 9958 9616
[email protected]

Shivani Gosai
Lawyer
+61 2 9169 8417
[email protected]

August 5, 2020

As part of the implementation of Stage 4 restrictions in Metropolitan Melbourne, employers that are able to continue to conduct onsite work must issue their employees with work permits in the prescribed form. Limited exceptions apply for employees at risk of family violence, law enforcement, emergency services workers or health workers who carry employer-issued photographic identification which clearly identifies the employer.

Unless an exception applies, only “Permitted Work Premises” may operate with on-site operations in metropolitan Melbourne. Other businesses must move to working from home, or else close for the period of the restictions. Details of those businesses that are permitted to remain open for onsite work are detailed here: Melbourne coronavirus restrictions on businesses

A copy of the template form for the work permit is here: Permitted Worker Scheme Template

The Department of Justice has indicated that penalties of up to $19,826 (for individuals) and $99,132 (for businesses) will apply to employers who issue worker permits to employees who do not meet the requirements of the worker permit scheme or who otherwise breach the scheme requirements.  There will also be on-the-spot fines of up to $1,652 (for individuals) and up to $9,913 (for businesses) for anyone who breaches the scheme requirements. This includes employers, and employees who do not carry their worker permit when travelling to and from work.

For further detail on business restrictions in Victoria and Nationally more broadly, Critical Information Factsheets for each State are available for download on the Kingston Reid COVID-19 Resources page.

For further details regarding how the Stage 4 restrictions impact your business or for advice on managing the impacts of the restrictions, please contact a member of the Melbourne Kingston Reid team.

Stay safe.

Steven Amendola
Partner
+61 3 9958 9606
[email protected]

Dominic Fleeton
Partner
+61 3 9958 9616
[email protected]

Katie Sweatman
Partner
+61 3 9958 9605
[email protected]