Intuitively it makes sense that you can’t access paid personal leave if you aren’t at work in the first place. This common sense principle was affirmed on Monday by the Federal Court as it sided with Qantas in a dispute over the payment of entitlements to employees stood down due to COVID-19 restrictions.

The Court made it clear that the purpose of the entitlement to personal/carers’ and compassionate leave is to relieve employees from the work they were otherwise required to perform. That is, you get paid when you are too sick to come to work. Where employees have been stood down due to COVID-19, there is no work. Thus, “if there is no work available to be performed by the employee, there is no income and no protection against that which has not been lost.”[1]

Background

In mid-March this year Qantas announced its intention to temporarily stand down approximately two-thirds of its employees, a total of around 20,000 workers. A number of Unions, on behalf of those Qantas employees, claimed that stood down workers were entitled to access paid personal, carer’s or compassionate leave during their period of stand down.

Qantas denied that it owed stood down employees these entitlements.

While the proceedings also dealt with certain entitlements under Qantas enterprise agreements, the relevance of the case for all employers is what the Court said about the provisions of the Fair Work Act (the Act) and the National Employment Standards.

No work, no income, no protection

If asked the question without looking at the provisions of the Act, most people would assume that where there is no work and an employee is stood down, it would be incongruous for that employee to be paid because they were sick or had to care for a family member. However, the words of the Act do not state this logical conclusion expressly.

The Court’s decision was that logic prevails following from:

• the terms of ss 97, 105, 524 and 525 of the Fair Work Act;
• an understanding of the object and purpose sought to be achieved by the power to stand down employees; and
• a proper understanding of the object and purpose of the leave entitlements in issue in the present proceeding.[2]

Central to the analysis of the above was the idea of personal, carer’s and compassionate leave as a form of ‘income protection’.

In circumstances where an employee is lawfully stood down, and there is no work which the employee can perform and thus receive an income for, an employee is not entitled to access these ‘income protection’ leave entitlements.

Should employees have been able to access sick leave and other related entitlements whilst lawfully stood down because there was no work, this would “go against the very object and purpose of conferring those entitlements – namely an entitlement to be relieved from the work which the employee was otherwise required to perform”.[3]

The Court also emphasized that the stand-down power itself served two important purposes; offering businesses financial relief and protecting workers from termination. Making employers pay these entitlements after standing down employees would defeat the principal purpose, being “namely, to protect the employer against such claims”.[4]

Takeaway for Employers

If you have had to stand down employees as a consequence of COVID-19 restrictions, and have done so lawfully, those employees do not have a right to access paid personal, carer’s or compassionate leave during their stand down period.

However, keep in mind that stood down employees can access other entitlements, such as annual leave, long service leave and government assistance like JobKeeper payments.

The unions involved have foreshadowed an appeal so employers should keep an eye on this space.

If this alert has raised any concerns for you in relation to stand downs and leave or other entitlements, please feel free to contact us here at Kingston Reid to discuss.

 

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

Kathleen Weston
Lawyer
+61 2 9169 8415
[email protected]

 

[1] Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & Ors v Qantas Airways Limited [2020] FCA 656, [35] (Qantas Decision).
[2] Ibid, [10].
[3] Ibid, [35].
[4] Ibid.