Fair Work Commission

Introduction

On 9 April 2020, the Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020 introduced a new Part 6-4C into the Fair Work Act 2009. At that time, most provisions in Part 6-4C were to operate until 28 September 2020, and enabled employers that qualified for the jobkeeper scheme and were entitled to jobkeeper payments for employees to give certain directions to employees and make certain requests of them. This included making requests that an employee take annual leave.

Part 6-4C was significantly amended on 3 September 2020 by the Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Act 2020, to support the extended operation of the jobkeeper scheme until 28 March 2021. As amended, Part 6-4C still allows employers that qualify for the jobkeeper scheme to access a range of flexibility measures in giving certain directions to employees and making certain requests of them. However, from 28 September 2020, Part 6-4C no longer allows employers to make requests that an employee take annual leave.

Part 6-4C also now allows employers that were entitled to one or more jobkeeper payments in the period prior to 28 September 2020, but no longer qualify for a jobkeeper payment on or after 28 September 2020 (legacy employers), to access modified flexibility measures. To access these measures, legacy employers must have a certificate stating that they have experienced at least a 10% decline in turnover.

Part 6-4C allows the Fair Work Commission to deal with disputes about the operation of the new Part.

The provisions of the new Part are confined to an employer that is a ‘national system employer’ and to an employee who a ‘national system employee’ (s.789GC). Note also the extended meaning of these terms found in Division 2A of Part 1-3 of the Fair Work Act.

Directions

An employer that qualifies for the jobkeeper scheme and becomes entitled to jobkeeper payments for an employee during the relevant period, can 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 Fair Work 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.

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. A direction does not apply to an employee if it is unreasonable (s.789GK), and the employer must consult the employee, and give the employee written notice of the intention to give the direction at least 3 days before it is given, or a lesser period if the employee genuinely agrees. A direction to perform other duties or to work at a different place must also be ‘necessary to continue the employment of one or more employees’ (s.789GL).

Legacy employers that hold a 10% decline in turnover certificate can give modified jobkeeper enabling directions to employees they were previously entitled to jobkeeper payments for (ss.789GJA, 789GJB and 789GJC), subject to more stringent consultation requirements.

Each of the substantive direction provisions contains additional requirements, including in relation to safety. 

A direction has effect despite a ‘designated employment provision’ which includes a term of a contract and a fair work instrument, but operates subject to the protections in Division 12. 

Leave continues to accrue as if the jobkeeper enabling direction had not been given (s.789GS).

Jobkeeper enabling directions do not apply on or after 29 March 2021.

Requests

There are also provisions that enable an employer that is qualified for the jobkeeper scheme, and entitled to jobkeeper payments for an employee, to give the employee a request, which the employee must then consider and not unreasonably refuse. In some circumstances, legacy employers can also make requests of employees that they were previously entitled to jobkeeper payments for.

An employer may request an employee to agree to work on days or at times that are different from the employee’s ordinary days or times, but which do not reduce the employee’s number of hours of work (compared with the employee’s ordinary hours) (s.789GG). If the request is made by a legacy employer, any agreement must not have the effect of requiring the employee to work less than 2 hours in a day.

Second, prior to 28 September 2020, an employer that is qualified for the jobkeeper scheme and entitled to jobkeeper payments for an employee may request an employee to take paid annual leave, provided the request does not result in the employee having a balance of fewer than 2 weeks (s.789GJ(1)). (An employer and employee can also agree to the employee taking twice as much paid annual leave at half pay under s.789GJ(2).) The annual leave provisions will be repealed on 28 September 2020.

If an employer has given an employee a jobkeeper enabling stand down direction, the employee may give the employer a request to engage in ‘reasonable secondary employment’, or a request for training or professional development. The employer must consider and must not unreasonably refuse the request (s.789GU). 

Requests are also subject to the relevant employer payment obligations in Division 2 and the protections in Division 12.

Requests and agreements made under the jobkeeper provisions of the Fair Work Act do not apply on or after 29 March 2021.

Disputes

The Commission ‘may deal with a dispute about the operation of this Part,’ including by arbitration (s.789GV(2)). Mediation, conciliation, recommendations and opinions are also contemplated (see the reference to s.595(2) in the note to s 789GV(2)). There must first be an application from an employer, employee, union or employer association. 

The Commission ‘may’ make any of the orders in s.789GV(4), which includes any order it considers ‘desirable’ to give effect to a direction, setting aside a direction, or substituting a different direction. The Commission may also make ‘any other order it considers appropriate’. The Commission must take into account ‘fairness between the parties concerned’ (s.789GV(7)).

Disputes coming before the Commission may concern, for example:

• whether a jobkeeper enabling stand down is ‘because of’ changes to business attributable to the pandemic or the government’s response to it
• whether an employee ‘cannot be usefully employed for the employee’s normal days or hours’ (potentially less clear cut in the case of a partial stand down)
• safety implications of directions, including in relation to transmission of the virus
• whether alternative duties are within an employee’s skills and the scope of the business concerned
• suitability of alternative workplaces
• the reasonableness of employee refusals to work different days or times, or to take annual leave
• whether a direction is unreasonable in all of the circumstances
• employer compliance with consultation and notice requirements regarding a direction, and
• whether a direction to perform other duties or work at a different place is ‘necessary to continue the employment of one or more employees’.

The Federal Court can make an order terminating a jobkeeper enabling direction or agreement made by a legacy employer if it is satisfied that the employer did not satisfy the 10% decline in turnover test, as well as any other order that the court considers appropriate (ss.789GXD and 789GXE).

Except for Division 5, the relevant divisions of Part 6-4C are repealed with effect from 29 March 2021 and any jobkeeper enabling directions (and agreed changes to working days and times) in effect at the time of repeal then cease to have effect. Division 5, which deals with taking paid annual leave, is repealed with effect from 28 September 2020. The Commission can deal with disputes after 29 March 2021 (but cannot make an order giving effect to a direction or substituting a direction after that date).

See the Explanatory Memorandum for the Coronavirus Economic Response Package Omnibus (Measures No. 2) Bill 2020 and the Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020.