Life after JobKeeper: Managing staff in the event of lockdown

By Alex Millman and Lindsay Carroll, NRA Legal

The end of the Federal Government’s JobKeeper program on 28 March 2021 saw with it the end of several legislative provisions which provided employers with crucial flexibilities to respond to an ever-shifting business environment.

As the Greater Brisbane area enters another lockdown, the pinch from this sudden loss is becoming more and more apparent. In this article we will explore what mechanisms continue to exist under the Fair Work Act 2009 (Cth) (FW Act) for businesses to manage their pathway forward.

 

Limitations on employer flexibility

At the outset, it ought to be appreciated that many of the provisions which allow for flexibility under either the FW Act or the modern award system are aimed at increasing the ability of employees to seek and obtain flexible working arrangements.

The same cannot be said of employers; indeed, there are limited circumstances in which employers can unilaterally impose alternative working arrangements on their employees.

It should also be noted that in most cases, an employer cannot take away a flexibility once it has been granted to an employee. This can make responding to sudden changes in the commercial situation challenging.

 

Access to leave as a mitigation measure

Employers often forget that not only is leave a means of employees securing payment while away from the workplace, it is also a means of ensuring an employee’s absence from the workplace for a period.

Where a slackness of trade means that there is a slackness in the employee’s usual work, the employee may be willing to agree to take a period of leave instead. While this does not necessarily ease the burden on the business’s bottom line, it does ensure that the employer’s contractual obligation to their employee is met, and can have longer-term benefits to the business.

It should be noted that businesses can only compel employees to take leave in limited circumstances, with these circumstances specified in the relevant industrial instrument. These often include requirements that employees be given extended periods of notice – sometimes up to eight weeks’ notice – of the requirement to take leave.

While this can be helpful for managing long-term liabilities, it is generally not of assistance in dealing with immediate staffing issues. For short-term measures, leave by agreement will be necessary.

Importantly when considering leave, employers operating under modern awards will continue to have access to the temporary COVID-19 measures in Schedule X of most modern awards until the end of the year. In most modern awards, this includes the ability for employees:

  • to agree to take annual leave at half pay; and/or
  • to take up to two week’s unpaid pandemic leave where they are unable to work due to the COVID-19 pandemic of the government response to it.

Note that unpaid pandemic leave must be taken at the request of the employee; it cannot be directed to be taken by the employer.

 

The dubious providence of unpaid leave

Just as it is possible for employees to agree to take paid leave, it is also possible for employees to agree to take unpaid leave.

This can act as a means of “partial stand down”, as it were, however there is a certain amount of risk in such arrangements as unpaid leave by agreement is only possible as the legislation does not expressly prohibit it.

The taking of unpaid leave also does not count as service, so leave entitlements do not accrue on time taken as unpaid leave.

Should an employer and an employee enter into such an arrangement, it is important that the arrangement is properly documented and wherever possible be of limited duration. Employers should bear in mind that, in the absence of agreement, they cannot compel an employee to take unpaid leave.

 

Alternative duties and locations

Despite the lapsing of JobKeeper flexibilities allowing employers to direct an employee to perform different duties or to work at different locations, many contracts of employment include similar provisions which remain in effect. Employers should check their contracts of employment to see whether they enjoy such privileges.

When exercising such a contractual power, employers should remember that employees have the right to refuse any direction that is unlawful or unreasonable. While a contract may render a direction to perform different duties or work at a different location lawful, it does not necessarily render the direction reasonable – this will depend on the circumstances of each direction and each employee.

 

Stand down under the FW Act

With the expiry of the ability to issue JobKeeper-enabled stand down directions, the only circumstance in which employers are able to direct employees to be absent from work, without pay, is a stand down under s.524 of the FW Act.

A s.524 stand down is quite different from a JobKeeper-enabled stand down in that:

  • it enables only “full” stand downs; “partial” stand downs are not within the ambit of s.524; and
  • mere slackness of trade is not good enough; there needs to be a “stoppage” of work.

A s.524 stand down still requires that the employee must not be able to be “usefully employed” before the stand down can be validly imposed.

As with JobKeeper-enabled stand downs, this does not refer to the employee’s usual duties being available; rather, it requires the employer ask whether there are any duties at all, no matter how different from the employee’s usual duties, that the employee can reasonably perform. If the answer to this is “yes”, then the employee cannot be stood down.

There are some limitations to this. For example, if there are only enough duties for one person to be “usefully employed” doing them, then the employer is able to give those duties to a single employee and stand down the remainder.

In ideal circumstances, stand down should be an avenue of last resort rather than first response, and employees who feel disadvantaged by a stand down can dispute their employer’s decision in the Fair Work Commission.

 

If you have any questions about the legal options available to you for managing your staff during the ongoing COVID-19 pandemic, please contact NRA Legal on 1800 572 679.