02 April 2020

COVID-19: Variation of modern awards at the initiative of the Fair Work Commission

This article was written by Murray Kellock, Dominic Landvogt and Bridget Sheahan.

On its own initiative, the Fair Work Commission (FWC) has proposed to vary 103 modern awards by inserting a new Schedule: Schedule X – Additional measures during the COVID-19 pandemic.

On Wednesday 1 April 2020, a FWC full bench (comprising President Ian Ross, Vice Presidents Adam Hatcher and Joseph Catanzariti, Deputy Presidents Ingrid Asbury and Richard Clancy and Commissioner Paula Spencer) issued a statement to this effect, exercising its powers under section 157(3) of the Fair Work Act 2009 (Cth) (FWA).

If approved, the Schedule will operate until 30 June 2020, unless extended by application or on the initiative of the FWC. The changes do not preclude other applications to vary modern awards.

Interested parties are encouraged to lodge written submissions by 4pm on Monday 6 April 2020. If opposing submissions are received, a hearing will be held at 2pm on Wednesday 8 April 2020 by telephone. Alternatively, if no opposing submissions are received, the FWC will determine the matter without a hearing. 

Schedule X – Additional measures during the COVID-19 pandemic

The Schedule introduces two measures.

(a) Unpaid pandemic leave

An employee is entitled to take two weeks’ unpaid pandemic leave if the employee is required, by government or medical authorities or acting on medical advice, to self-isolate or is otherwise prevented from working by measures taken by the government or medical authorities in response to the COVID-19 pandemic in circumstances where the employee is required to work at premises occupied by their employer.

Unpaid pandemic leave will be available to full-time, part-time and casual employees (not pro-rated). 

Importantly, it is not necessary for employees to exhaust their paid leave entitlements before accessing unpaid pandemic leave.

Further, the leave is available in full immediately, rather than accruing progressively during a year of service, and is consistent with the approach taken for unpaid domestic violence leave.

(b) Annual leave at half pay

This provision provides for employees by agreement with their employer to take twice the amount of their annual leave at half pay.

Similar provisions have recently been inserted into the Restaurant Industry Award 2010, Clerks – Private Sector 2010 and Hospitality Industry (General) Award 2010.

Context

The FWC’s proposed variation seeks to address the “regulatory gap”, exposed by the current workplace climate, including business shutdowns and changes to working conditions.

Employees who have contracted COVID-19 may have an entitlement to paid personal/carer’s leave under the National Employment Standards (NES). However, these numbers are likely to be limited for a number of reasons, including:

  • the NES entitlement doesn’t apply to casuals;
  • the NES entitlement is for 10 days’ paid leave for each year of service. It is likely that a significant number of employees will have used some or all of their entitlement, reducing the amount available;
  • the NES entitlement accrues progressively during a year of service, so those employees with less than 12 months’ service will have less than 10 days’ paid leave; and
  • under the NES, paid personal/carer’s leave applies “because the employee is not fit for work because of personal illness”. If an employee is required to self-isolate but are not displaying any symptoms and have not tested positive to COVID-19, they probably do not have a “personal illness”.

Further, protection against unfair dismissal under section 352 of the FWA which covers temporary absence through illness or injury might not apply to employees required to self-isolate.

The variation seeks to “strike a balance” between the various competing interests and to protect vulnerable employees.

Which modern awards are covered?

The FWC recently briefed Professor Borland to provide an expert report (see here) on the industries most likely to be adversely affected in the short term, in order to identify which modern awards should be prioritised given the number of employees affected.

As a result, the FWC has identified 103 modern awards that will be varied. This list can be found from page 28 of the FWC statement.

Please note that with respect to the Restaurant Industry Award 2010, Clerks – Private Sector 2010 and Hospitality Industry (General) Award 2010, only the provisions relating to unpaid pandemic leave will be inserted. These awards have already been varied to include provisions relating to annual leave at half pay.

The situation is evolving, and further modern awards may still be varied.

Key contacts

COVID-19: Implications for Business

The spread of Coronavirus (COVID-19) has forced us to think and act differently. Beyond the human response, now is the time to think about what the consequences may be on your business, and how best you can prepare for those.

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