This article was written by Philip Willox, Ruth Rosedale and Holly Gretton.
In a highly anticipated decision, the Federal Court has confirmed that Qantas is not required to pay personal/carer's leave or compassionate leave to employees during a period in which they have been lawfully stood down.
For many businesses that have stood down and are continuing to stand down employees in the wake of COVID-19, the decision is an important clarification of the operation of the stand down and leave provisions in the Fair Work Act 2009 (Cth).
The decision
The decision concerned two separate proceedings commenced by unions seeking declarations that Qantas was required to pay personal/carer's leave and compassionate leave to stood down employees.
Justice Flick dismissed both applications focusing on the premise that personal/carer's and compassionate leave is a 'form of income protection' that can't be accessed where employees are not receiving income.
Justice Flick acknowledged the unprecedented effect that COVID-19 has had on employers and employees alike, especially those in the airline industry. However, even against that backdrop, his Honour considered that the object and purpose of the power to stand down and its interaction with leave entitlements, whether under the Fair Work Act 2009 or under the applicable enterprise agreement, was to provide 'financial relief' to the employee for income they would have earned had they been able to work. It logically follows that in circumstances where employees are not receiving income, they are not entitled to access paid personal leave and related entitlements because no income has been 'lost.'
Further, his Honour noted that if employees were able to access personal/carer's or compassionate leave while lawfully stood down this would defeat the two key purposes of stand down. The first, is to provide financial relief to an employer 'where, through no fault of its own, it has no work that the employees can usefully perform'. The second, is to protect the employees from 'what would otherwise flow from the termination of their services.'
Importantly, his Honour also looked at the stand down and leave clauses of the relevant enterprise agreements applying to impacted employees and found that they were totally consistent with ss 524 and 525, and ss 97 and 105 respectively of the Fair Work Act 2009 (Cth). As a consequence, his Honour's conclusion that employees could not access their leave entitlements was the same regardless of whether the source of the power to stand down and the entitlements were taken to be found in the applicable enterprise agreements or the Fair Work Act 2009 (Cth).
Where to now?
The unions are considering an appeal and are continuing to maintain pressure on Qantas to pay personal leave to its employees. Employers should watch this space in the weeks to come.
In the meantime, the decision provides that where employees have been lawfully stood down due to COVID-19, employees do not have a right to access paid personal/carer's or compassionate leave during the period of the stand down.
Of course, other entitlements such as annual leave, long service leave and other support such as JobKeeper may remain available for employees to access.
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & Ors v Qantas Airways Limited [2020] FCA 656)
