FWC JobKeeper decision does not end in employee’s favour

15 May 2020

A recent decision delivered by the Fair Work Commission (FWC) has revealed when it is unreasonable for employees under the JobKeeper scheme to refuse requests by their employer to use up annual leave.

The FWC ruled against Ms McCreedy in her dispute against her employer Visual Roadshow Theme Parks (VRTP) that she was not unreasonable in her refusal of the request to use her annual leave because:

  1. she believed that the JobKeeper legislation was not intended to assist large employers like VRTP who are in a solid financial position
  2. her employer was trying to make her take a substantial amount of annual leave with the intention of reducing her annual leave balance

The background

Part 6-4C of the Fair Work Act 2009 (Cth) (Act) allows employers to give certain directions to employees (JobKeeper enabling directions) and make certain requests of them.

In particular, section 789J(1) of the Act allows an employer to request employees under the JobKeeper scheme to take annual leave, and that the employee not unreasonably refuse, so long as the employee maintains a minimum balance of two weeks’ leave at all times.

Ms McCreedy had worked 22 years at the company, typically working two days a week and had accrued annual leave of almost 10 weeks and nine weeks’ long service leave during that time.

Consistent with the JobKeeper-enabling direction, VRTP requested Ms McCreedy to take annual leave at the rate of one day per week (given her part-time hours of work), without reducing her minimum balance below four days. Further, she was receiving double her usual wage under the payment scheme.

Ms McCreedy argued that this directive was unfair as large employers such as VRTP should not be able to draw down on employees’ annual leave balances since they are not at risk of bankruptcy. Contrary to this, the FWC recognized VRTP’s submissions that its business was currently inoperable due to COVID-19.

The decision

Taking into account fairness between the parties, the FWC held that VRTP was permitted under the JobKeeper legislation to request of all relevant employees to take annual leave of up to 2.5 days per week while in receipt of the JobKeeper payment.

The relevant test was 'whether [the employee] has unreasonably refused the request of VRTP.' In this instance Ms McCreedy’s refusal was unreasonable.

In consideration of the hearing and material filed, the FWC found Ms McCreedy made unwarranted attacks on VRTP, despite the JobKeeper provisions being available for all eligible employers, small or large.

The FWC ordered the Ms McCreedy not continue to refuse the request made by her employer.

Implications for you

This case confirms that employers eligible for the JobKeeper scheme have a right to request their workers to take annual leave when in receipt of such payments so long as the minimum balance is at two weeks at all times.

This is not limited to only small businesses but also large corporations as long as they are eligible.

The purpose of the JobKeeker package is to support eligible organisations going into hibernation or experiencing a downturn in their business, to allow for the continued employment of eligible employees.

Leonie McCreedy v Village Roadshow Theme Parks Pty Ltd [2020] FWC 2480

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