A recent decision delivered by the Fair Work Commission (FWC) has demonstrated that the FWC may vary an Employer’s JobKeeper enabling stand down direction.
In Allan Jones v Live Events Australia Pty Ltd [2020] FWC 3469, the FWC ruled in favour of full-timer Mr Jones’ challenge to his employer Live Events Australia Pty Ltd (Live Events) reduction of his minimum hours of work by almost half.
The background
Live Events is in the business of contracting with networks in Australia and New Zealand to broadcast live events, including sport. Mr Jones is employed on a full-time basis as a broadcast engineer. Although not exclusively contracted to work on racing, Mr Jones’ work mainly concerned horseracing events and 97% of his rostered work consisted of this.
The COVID-19 pandemic severely disrupted the events industry and sport however, horseracing remained relatively uninterrupted. The overall business of Live Events was subject to adverse revenue impacts that were significant and severe enough for operations to be materially scaled back and budgets recast.
On 24 March 2020 (pre-JobKeeper), Live Events asked staff (nationally) to agree to up to a 40% reduction 'in salary and subsequent working hours' with the exception for technical staff if working shifts above this level were available.
Mr Jones’s ongoing disagreement to this proposal resulted in Live Events later issuing him with a JobKeeper enabling stand down direction (the Direction), reducing his hours from 80 hours per fortnight to 48 hours.
What was in issue
- Whether the employer’s direction was authorised pursuant to s 78GDC(1) of the Fair Work Act 2009 (Cth) (FW Act).
- Whether the direction was unreasonable, giving effect to s 789GK of the FW Act.
The decision
The FWC found that whilst ordinary hours worked by Mr Jones have not materially reduced below 80 per fortnight, the regular nature of previously worked overtime, and the level of that overtime has materially reduced his overall hours of work and earnings in the COVID-19 period compared to pre-COVID-19.
Was the direction authorised?
His normal hours (including regular overtime) are not likely to completely restore before the conclusion of his stand down period. Taking this into account, together with the possibility that his hours could be altogether reduced should there be an unwelcome sudden cancellation of a racing event due to COVID-19, section 789GDC(1)(c) was made out.
Further, the FWC concluded that the JobKeeper enabling stand down was reasonable having regard to (amongst other things) the overall impact of COVID-19 on the operations of Live Events and its obligations to act in the best interests of all its employees to redistribute available work.
Was the direction reasonable?
However, the FWC concluded that Live Events overplayed its hand and that the terms of the Direction it issued to Mr Jones ere unreasonable. This was because while Live Events imposed a stand down direction reducing his hours to 48 per fortnight (a 40% reduction), Live Events lifted the 40% reduction imposed on other staff to a figure of 20% which it advised staff more accurately reflected the then business circumstances.
As a result, the FWC varied the direction to reduce Mr Jones’s hours by 20%. The FWC also noted that it would be inappropriate for Live Events to leave the Direction in place (even in its varied form) if, during the period of its operation, the employer generally lifted the 20% reduction for other employees and returned its workforce to 100% of hours and salary.
Implications
Employers need to remember that despite the need to reduce employee hours given the current state of the health and economic environment, the FWC might overturn that decision if it finds that there is no objective or fair basis for doing so. Employees are able to initiate disputes within the FWC regarding Jobkeeper stand down under s 789GV of the FW Act.
Employers should also be mindful of the proportion of hours cut back to an employee and review whether this is consistent across the workforce. A JobKeeper enabling stand down direction does not entitle an Employer to simply reduce employee hours to its liking.
The FWC may conclude that reduced hours are unreasonable upon an investigation of the business’s output not only overall but also in relation to the area of work allocated to the employee in question.
