| [2020] FWC 2928 |
| FAIR WORK COMMISSION |
REASONS FOR DECISION |
Fair Work Act 2009
s.789GV - Application to deal with a dispute under Part 6-4C
W. C.
(C2020/4213)
COMMISSIONER PLATT |
ADELAIDE, 4 JUNE 2020 |
Application to deal with a dispute in relation to JobKeeper – whether JobKeeper direction was reasonable – application dismissed.
[1] On 2 June 2020, the Applicant lodged an application pursuant to s.789GV of the Fair Work Act 2009 (the Act) concerning a JobKeeper direction given to him by his employer (the Respondent) concerning his hours of work.
[2] Much of the information presented to the Fair Work Commission (the Commission) concerned the financial impact of the COVID-19 Pandemic on the Respondent. In order to facilitate the reporting of that information in a manner that does not cause further detriment to the business (and potentially exacerbate impacts on employees), I have determined to restrict publication of the evidence and transcript in so far as it identifies the parties. I have also determined to anonymise the names of the parties in this decision pursuant to s.594 of the Act.
[3] The Application was served upon the Respondent on 3 June 2020.
[4] The matter was listed for hearing at 2.00pm on 3 June 2020. The Applicant represented himself and the Respondent was represented by its Chief Financial Officer and its Managing Director.
[5] The background information was provided under affirmation by the persons present at the hearing and is largely undisputed.
[6] The Respondent operates a recruitment business for accounting and finance roles in Australia and New Zealand. It derives profit from providing recruitment services and securing placements. The business has been significantly impacted by the COVID-19 Pandemic.
[7] The Applicant is a member of the ‘Directorship team’ and works in the Brisbane Office with 6 other staff.
[8] I am advised that the Respondent has qualified for the JobKeeper scheme and it is receiving JobKeeper payments in respect of the Applicant.
[9] On 1 April 2020, the Respondent issued JobKeeper directions to its employees. The direction given to the Applicant had the effect of reducing his hours to 65% of the pre Pandemic arrangements. This direction was not the subject of dispute.
[10] The Chief Financial Officer advised that the group has reported losses of over $400,000 in April 2020 and further losses would be incurred for the month of May 2020. The Respondent contended that the Brisbane Office had reported significant losses in the financial YTD which exceeded $250,000. The precise amount of the losses was not agreed by the Applicant.
[11] With respect to cashflow, the Respondent advised that wages in the Brisbane office were approximately $40,000 per month and that the April revenue was $20,000 and that this fell to $5,000 in May. This did not appear to be in dispute.
[12] In response to the business performance on 1 June 2020, the Respondent issued a further JobKeeper direction to its employees. This notification was withdrawn in respect of the Applicant.
[13] On 3 June 2020 a further JobKeeper direction was issued to the Applicant. The parties accepted that the consultation and notice period as required under the Act was met in respect of this direction.
[14] The direction further reduced the Applicant’s hours of work to 12 hours per week and, as a result, his remuneration fell to $3,558.75 per month. This amount was equivalent to the JobKeeper minimum payment. The Applicant contended that these changes would reduce his remuneration by a 71.5% reduction to his pre COVID-19 level. This was not disputed.
[15] The Applicant contends that he is the sole income earner in his household and that he would be unable to provide for his family on the reduced income. He also contends that 12 hours per week would not be sufficient to meet his role requirements.
[16] The Applicant contended that $18,000 of revenue had been secured for June 2020 and this supported the working of increased hours. The Respondent countered that this income was forecast but that the placements had not yet occurred and the revenue would not be received until July 2020. The Respondent emphasised that this was a cashflow issue.
[17] The Respondent contends that it will continue to lose money even with the new direction and is unable to continue to sustain the current level of losses. The direction states that it is temporary in nature and will be reviewed on a monthly basis.
[18] Having heard the background, I unsuccessfully sought to resolve the matter by conciliation. I advised the parties that I would arbitrate the matter and invited any further submissions. The parties relied on the information provided (including the documents filed).
[19] Part 6-4C of the Act was introduced into the Act by the Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020. The Part allows employers to give certain directions to employees and to make certain requests of them.
[20] The new Part allows an employer who qualifies for the JobKeeper scheme and becomes entitled to JobKeeper payments for an employee during the relevant period, to give the employee three new kinds of directions:
• A ‘job keeper enabling stand down’ (s.789GDC) is a form of flexible stand down. It can require an employee not to work on a day they would usually work, work for a lesser period on a day, or work a reduced number of hours overall (which can be nil). Similar to a regular stand down under s.524 of the Act or an award or agreement, there is a causative requirement, but one linked to the pandemic: the stand down direction can only be given if the employee ‘cannot be usefully employed for the employee’s normal days or hours ... because of changes to business’ that are ‘attributable to the COVID-19 pandemic’ or to ‘government initiatives’ to slow its transmission (s.789GDC(1)(c)).
• Under s.789GE, an employer may direct an employee to perform other duties. The duties in question must be within the employee’s skill and competency, and must be reasonably within the scope of the employer’s business operations. The employee must also have any relevant licence or qualification required to perform the duties.
• An employer may also give an employee a direction to work at a different place (s.789GF). This can be any place that is different from the normal place of work, including the employee’s home, provided that it is ‘suitable for the employee’s duties’. It must not require the employee to travel an unreasonable distance.
[21] Each of these three directions is a ‘JobKeeper enabling direction’ and is subject to the employer payment obligations in Division 2 and conditions in Division 6.
[22] Section 789GK of the Act provides that a direction does not apply to an employee if it is unreasonable.
[23] The employer must consult the employee, and give the employee written notice of the intention to give the direction at least three days before it is given, or a lesser period if the employee genuinely agrees.
[24] Section 789GV(1) of the Act states that the Commission ‘may deal with a dispute about the operation of’ the new Part.
[25] There was no suggestion that there are any jurisdictional barriers to my determining the matter.
[26] It appears from the evidence before me that the Respondent was entitled to make the ‘JobKeeper enabling direction.’
[27] The key matter in dispute is whether the direction is reasonable within the meaning of s.789GK of the Act.
[28] As can be expected, each case will turn on its facts.
[29] Whilst the Applicant’s reduced working hours may impact increased revenue from being secured, it is not the Commission’s role to stand in the shoes of the employer unless the employer’s position is clearly untenable. 1
[30] It is not in dispute that the COVID-19 Pandemic has and continues to significantly impact the Respondent’s income stream and cashflow.
[31] The Respondent’s income from the Brisbane operation was 50% of wages alone in April and 12% in May 2020. Even with the forecast revenue increase advised by the Applicant, it appears likely that June will result in a negative cashflow.
[32] In considering this application I have sought to weigh up the impact on each party. I accept that the financial impact of the direction on the Applicant is significant, I also accept that the Respondent has significant losses to date and it is expected that they will continue in June.
[33] In the circumstances, however, I find that the Respondent’s decision by way of the second JobKeeper enabling direction to further reduce the hours of work (and consequently the Applicant’s income) is reasonable.
[34] In reaching this conclusion I have relied on the Respondent’s commitment to review the situation each month.
[35] Having determined that the ‘JobKeeper enabling direction’ is reasonable within the meaning of s.789GK of the Act, I must dismiss the application.
[36] An Order2 reflecting this decision will be issued.
COMMISSIONER
Appearances (by telephone):
Mr WC on his own behalf.
Mr LM Chief Financial Officer on behalf of the Respondent.
Hearing details:
2020.
Adelaide:
June 3.
Printed by authority of the Commonwealth Government Printer
<PR719921>
1 Australian Federated Union of Locomotive Enginemen and State Rail Authority of New South Wales (the XPT case) (1984) 295 CAR 188