JobKeeper enabling stand down directions – employers currently entitled to jobkeeper payments

See Fair Work Act 2009 s.789GDC

Division 3 of Part 6-4C of the Act authorises an employer who qualifies for the jobkeeper scheme to give a jobkeeper enabling stand down direction to an employee.

A jobkeeper enabling stand down direction is a direction to:

• not work on a day or days on which the employee would usually work
• work for a lesser period than the period which the employee would ordinarily work on a particular day or days, or
• work a reduced number of hours (compared with the employee’s ordinary hours of work). This can include reducing the employee’s working hours to nil.

The time during which a jobkeeper enabling stand down direction applies is called the jobkeeper enabling stand down period.

A jobkeeper enabling stand down direction is authorised if:

• the employer qualified for the jobkeeper scheme when the direction was given
• the employee cannot be usefully employed for the employee’s normal days or hours during the jobkeeper enabling stand down period because of changes to business attributable to:
  • the COVID-19 pandemic, or 
  • government initiatives to slow the transmission of COVID-19
• implementing the stand down direction is safe, having regard to (without limitation) the nature and spread of COVID-19, and
• the employer becomes entitled to one or more jobkeeper payments for the employee: 
  • for a period that consists of or includes the jobkeeper enabling stand down period, or 
  • for periods that, when considered together, consist of or include the jobkeeper enabling stand down period.

A jobkeeper enabling stand down direction does not apply during a period when the employee is taking paid or unpaid leave authorised by the employer, or the employee is otherwise authorised to absent from their employment.

During the jobkeeper enabling stand down period, the employer is required to comply with:

• the wage condition set out in the jobkeeper payment rules
• the minimum payment guarantee, and
• the hourly rate of pay guarantee,

but the employer is not otherwise required to make payments to the employee in respect of the jobkeeper enabling stand down period.

Related information

• Employer payment obligations

Reasonableness of jobkeeper enabling stand down direction

Transport Workers’ Union of Australia v Prosegur Australia Pty Limited

Transport Workers’ Union of Australia v Prosegur Australia Pty Limited [2020] FWCFB 3655 (Hatcher VP, Young DP, Cirkovic C, 13 July 2020).

Transport Workers’ Union of Australia v Prosegur Australia Pty Limited [2020] FWCFB 3865 (Hatcher VP, Young DP, Cirkovic C, 23 July 2020).

The respondent gave all its eligible employees, including full-time, part-time and long-term regular casual employees, a jobkeeper enabling stand down direction to change their working hours to 50 per fortnight. This was more hours than some casual employees had worked prior to the COVID-19 pandemic.

Arguing that the direction was unreasonable, the applicant said that it imposed an unfairly disproportionate reduction of hours on permanent employees compared with casual employees.

At first instance, the Commission found the direction was reasonable.

On appeal, the Commission quashed the original decision and directed the parties to have further discussions, having regard to a number of propositions including:

• if the direction meant that the ordinary hours of a part-time employee increased but full-time employees had their ordinary hours reduced, that would be unreasonable and unfair
• there is no need to issue a direction to reduce the ordinary hours of work of casual employees, as casual employees ordinarily do not have any defined number of ordinary hours but are engaged to perform work as required. However, for long-term regular casual employees, it is reasonable to provide some guarantee of hours to maintain their connection with the workplace and so the employer can derive commercial value from the jobkeeper subsidy it receives in respect of them
• the assessment of reasonableness must take into account in a significant way the entitlements of the employees affected by the direction. This means the direction must take into account whether the deprivation or reduction of pre-existing entitlements to hours of work disproportionately and unfairly affects one category of employee over another
• it is relevant that permanent employees might have access to leave entitlements to supplement their income in the face of reduced hours of work, and
• an alternative direction must be administratively workable and allow the employer to conduct its operations efficiently.

Following discussions, the parties each proposed an alternative jobkeeper enabling stand down direction.

Noting that the parties had agreed that there was no need to make a direction in relation to part-time or casual employees, the Full Bench ordered that the direction proposed by the respondent replace the direction it had originally issued. The new direction guaranteed full-time employees a minimum of 60 hours per fortnight, and included commitments that it would not roster part-time or casual employees in preference to full-time employees who are willing and available to work, and would not require any employee to increase their hours.

Jobkeeper enabling stand down direction unreasonable

Allan Jones v Live Events Australia Pty Ltd

Allan Jones v Live Events Australia Pty Ltd [2020] FWC 3469 (Anderson DP, 3 July 2020).

The applicant, a broadcast engineer whose work primarily involves coverage of horse racing events in Western Australia, normally worked in excess of 80 hours per fortnight pre-COVID-19.

The overall business of the respondent has been disrupted by COVID-19 and all its employees, except the applicant, agreed to a partial reduction to their contracted earnings of initially 40%. The applicant was given a jobkeeper enabling stand down direction reducing his minimum hours of work by 40%, from 80 to 48 per fortnight. At the time, the respondent continued to roster the applicant for around 80 hours per fortnight and he was performing productive work across those hours, but his regular overtime work had been scaled back.

The applicant argued that the jobkeeper enabling stand down direction was not authorised because the requirement in s.789GD(1)(c) that he could not be usefully employed for his normal days or hours had not been met, and the direction was ‘unreasonable in all the circumstances’.

The Commission considered that the applicant was not completely working his ‘normal’ hours (including regular overtime). Considering this and the possibility that his hours could be altogether reduced if there was a cancellation of horse racing events due to COVID-19, the Commission was satisfied that the requirement in s.789GD(1)(c) was made out.

However, the Commission was not satisfied that the direction was reasonable, as it was issued at a time when the respondent expected to continue to roster the applicant to work in excess of 48 hours per fortnight. The Commission said the direction was precautionary in nature, with the respondent seeking flexibility to reduce the applicant’s ordinary hours by 40% should it need to do so. The Commission observed that a reasonable level of contingency would not of itself render a direction unreasonable, but a contingency which is so disproportionate from the actual circumstances is an unreasonable direction.

The Commission made an order substituting the direction with a new direction that the applicant’s minimum hours of work be no less than 64 per fortnight where in all the circumstances this reduction is necessary and reasonable.