Federal Court confirms that employees are not entitled to access sick leave or compassionate leave while stood down

To prevent the spread of COVID-19, one of the first restrictive measures put in place by the Federal Government was to eliminate all non-essential travel, both domestic and international. Australia’s largest airline, Qantas Airways Limited (Qantas) was, and still is, severely affected by these restrictions. In mid March 2020, Qantas announced its intention to stand down approximately two thirds of its 30,000 workforce.

In response to Qantas’ announcement, two separate proceedings were commenced in the Federal Court of Australia (the Court) by four unions (the Unions) on behalf of Qantas’ employees, claiming that the employees were entitled to access paid personal/carer’s leave or compassionate leave during their stand down. Both proceedings were heard together.

On 18 May 2020, the Court delivered its judgment of Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Qantas Airways Limited [2020] FCA 656 and dismissed both proceedings initiated by the Unions, confirming that employees are not entitled to access paid personal/carer’s leave or compassionate leave while stood down.

Facts

Some employees were stood down by Qantas in response to the COVID-19 pandemic pursuant to the relevant applicable enterprise agreement, while others were stood down pursuant to section 524 of the Fair Work Act 2009 (Cth) (the FW Act).

It was common ground between the Unions and Qantas that the employees have been lawfully stood down, as there was a stoppage of work for which Qantas could not reasonably be held responsible and its employees could not be usefully employed.

Section 525 of the FW Act also provides that an employee is not taken to be stood down under section 524(1) of the FW Act during a period when the employee is taking paid or unpaid leave that is authorised by the employer, or is otherwise authorised to be absent from his or her employment.

Qantas denied that its employees are entitled to access paid personal/carer’s leave or compassionate leave during their stand down. Qantas submitted that the power of an employer to stand down employees who are otherwise ready and willing to perform their contractual services serves two important purposes:

• To provide financial relief to an employer from paying wages in circumstances where, through no fault of its own, the employer has no work that the employees can usefully perform; and
• To protect the employees from what would otherwise flow from the termination of their services.

Decision

The Court agreed with Qantas’ submissions in relation to the purpose of the right to stand down employees. The Court reiterated that there is no common law right of an employer to stand down an employee without pay in circumstances where there is no work the employee can usefully perform, unless that power is found in either legislative provisions or in the terms of an industrial agreement.

The Court considered a number of relevant authorities in concluding that sections 524 and 525 of the FW Act mirror the object and purpose of stand down provisions.

In relation to the object and purpose of paid personal/carer’s leave and compassionate leave, the Court referred to the Full Court’s decision of Mondelez v Australian Manufacturing Workers Union [2019] FCAFC 138 (summarised here) where it was held that the leave entitlement conferred by section 96 of the FW Act in relation to paid personal/carer’s leave is a form of income protection to employees.

Importantly, the Court in the Qantas decision concluded that “an employee cannot access such leave entitlements whilst stood down” because “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.” Qantas correctly submitted that “’income’ is not being protected if there is no available or required work from which to derive income in the first place.”

The Court also rejected the Unions’ argument that an employee who takes personal/carer’s leave is not to be taken as having been stood down because that is an instance of an “authorised absence” or an “authorised absence from work” pursuant to section 525 of the FW Act. The Court clarified that the purpose of section 525(a) of the FW Act is to permit an employer the choice of authorising an employee to take leave – which, although one of the purposes of a stand down is to alleviate the financial necessity to pay employees, that is a matter for the employer to decide. Secondly, section 525(b) of the FW Act is directed to circumstances in which provisions of the FW Act ‘authorise’ or ‘entitle’ an employee to be absent, for example, while engaged in an eligible community service activity, jury service or on public holidays.

The Court came to the same conclusion in respect of those employees who were stood down pursuant to the relevant applicable enterprise agreement.

Take Home Messages

The Court’s decision clarifies the longstanding position that employees are not entitled to be paid, or access personal, carer’s or compassionate leave, whilst lawfully stood down. This conclusion is consistent with the object and purposes of stand down provisions, supported by various authorities. We note that stand down provisions should be invoked as a last resort and advice should be sought before this is implemented in your organisation.

For more specific information on any of the material contained in this article please contact Sathish Dasan on +61 8 8210 1253 or sdasan@normans.com.au or Anastasia Gravas on +61 8 8217 1331 or agravas@normans.com.au.