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COVID-19 | The Federal Court rules on personal leave during stand down
In the decision Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Qantas Airways Limited [2020] FCA 656, handed down on 18 May 2020, Justice Flick of the Federal Court ruled that employees are not entitled to access paid personal/carer’s leave or compassionate leave during a period in which they are stood down pursuant to section 524 of the Fair Work Act (Act).
This case considered two union applications which claimed that Qantas was required to continue to provide access to paid personal and carer’s leave for employees who had been stood down pursuant to section 524 of the Act (due to the COVID-19 pandemic).
In his judgment, Justice Flick examined the relationship between two rights in the Act: the right of employers to stand down employees, and the right of employees to access personal/carer’s leave or compassionate leave.
In dismissing the union applications, Justice Flick noted that the paid personal/carer’s leave entitlement conferred by section 96 of the Fair Work Act was a “form of income protection”. Ultimately, employees who have been stood down are not earning the income which these entitlements are designed to protect. Justice Flick stated [at (31)]:
“[…] at the very heart of the ultimate conclusion, namely that an employee cannot access such leave entitlements whilst stood down, is the determination that such leave entitlements are an entitlement on the part of the employee to take leave from otherwise performing the work they are required to perform. It is the very characterisation of the leave entitlement conferred by s 96 as a ‘form of income protection’ which presupposes that an employee is in receipt of income. As Qantas has repeatedly submitted, and correctly so, ‘income is not being protected if there is no available or required work from which to derive income in the first place’.”
Justice Flick continued (at [35]):
“In circumstances where an employee has been lawfully stood down, and thus in circumstances where there is no work which the employee can perform and thereby derive income, an employee is not entitled to access the leave entitlements conferred by ss 96 or 105. To enable the employee to do so would go against the very object and purpose of conferring those entitlements – namely an entitlement to be relieved from the work which the employee was otherwise required to perform. If there is no work available to be performed by the employee, there is no income and no protection against that which has not been lost. Conversely, to expose the employer to a liability to pay leave entitlements after lawfully having invoked the power to stand down an employee would defeat one of the two principal purposes of standing the employee down – namely, to protect the employer against such claims.”
Although this decision arose in relation to a dispute between Qantas and its employees – and noting that many Qantas employees are covered by an enterprise agreement (the stand down terms of which did not affect the outcome in this case) – it is expected that this decision will have significant ramifications for the many employees in other industries across Australia who have been stood down under the Act due to the COVID-19 pandemic.
Notably, although this decision provides that there is no legal obligation for employers to enable employees who are stood down to access personal/carer’s leave or compassionate leave entitlements, employers can still elect to provide access to these entitlements.
At the time of writing, the TMU has indicated an intention to appeal. If that appeal proceeds it will be a case to follow with interest.