Beyond JobKeeper: Alternative flexibility options in the coronavirus epoch

By Alex Millman and Lindsay Carroll, NRA Legal

Many of our readers will doubtless be aware, by virtue of the many, many circulars issued in recent weeks, of the temporary amendments to the Fair Work Act 2009 (Cth) which allow employers greater flexibility in the engagement of employees who are receiving JobKeeper payments.

These measures include statutory authorization to direct employees to work fewer hours than their contracts, or their modern award or enterprise agreement, would otherwise require them to work, without any penalty to the employer provided certain requirements are met.

Relatively little attention appears to have been brought to amendments made to 103 modern awards on the same day that the JobKeeper legislation was passed, including:

  • the General Retail Industry Award 2010;
  • the Fast Food Industry Award 2010;
  • the Hair and Beauty Industry Award 2010;

and many others (for a full list, see Attachment A to the summary of the Fair Work Commission’s decision here).

These amendments, unlike the amendments to the Fair Work Act 2009 (Cth), do not require the employee to be in receipt of JobKeeper payments, and as such offer a little flexibility to employers who are otherwise excluded from those provisions.

So what does it all do?

Unpaid pandemic leave

The first of the new provisions made by the Fair Work Commission was to include a new kind of leave, called “unpaid pandemic leave”.

Under this provision, any employee is entitled to take up to two weeks’ unpaid leave if:

  • the employee is prevented from working because of a direction to self-isolate from government or medical authorities;
  • the employee is prevented from working because of a recommendation to self-isolate from a medical practitioner; or
  • is otherwise prevented from working because of measures taken by government and or medical authorities in response to the COVID-19 pandemic (such as service closures).

The key requirement here is that the employee must be prevented from working; the employee is not entitled to access this leave merely because it is convenient to do so.

Consequently, an employee who is directed to self-isolate, but can nevertheless continue to work from home (or any other place) during that isolation will not be entitled to access this unpaid leave.

The availability of this unpaid leave does not prevent an employee from accessing paid personal leave if they have any such leave available. Employees must notify their employer of their intention to take the leave, and provide evidence of their entitlement to take the leave, such as a directive from a medical authority, or a written recommendation from a medical practitioner.

This may then beg the question as to what purpose this leave serves. Fundamentally, this leave serves to plug a “regulatory gap” where the employee is not entitled to personal leave (for example, because they are not actually unwell) but where their employer declines to agree to a period of annual leave.

It also serves to protect casual employees from adverse action where their self-isolation requires them to make themselves unavailable for work, as accessing this form of leave would necessarily be a workplace right protected under Part 3-1 of the Act.

For employers, it is worth noting that “unpaid leave” is something that is not discussed in the legislation itself, and only arises in a few modern awards and enterprise agreements. For businesses wondering how to deal with employees who need to self-isolate, compliantly, this form of leave provides an alternative.

Annual leave at half pay

The second the new provisions inserted by the Fair Work Commission allows an employer and an employee to agree to the employee taking twice as much annual leave at half pay.

This allows, for example, an employee to agree to take 38 hours annual leave, and be paid the dollar value of that leave, or to take twice as much leave (76 hours) and still be paid the same amount as if they had taken 38 hours. The employee would, however, only lose 38 hours from their total annual leave balance.

The benefit of this to employers is that while the dollar value remains the same, the payment of that amount is stretched over a longer period. This can therefore help to manage cashflow just a little bit better.

Any agreement to take annual leave at half pay must be recorded in writing and retained as an employment record for that employee. It is important that the employee not be coerced into entering into such an agreement, and employees cannot be penalized if they decline to enter into such an agreement, as this would amount to adverse action under Part 3-1 of the Act which may attract substantial fines.

Mutual agreement forgives many (but not all) sins

Employers tend to have the habit of thinking that, in the absence of an ability to compel an employee to do something, their hands are tied.

While this may be true with some employees, by and large employees are individuals who have an interest in ensuring that there is a job for them to come back to, especially in the current economic climate.

Commonly overlooked is the ability for employers to simply engage with their employees and ask if they are willing to agree to temporary variations to the way things are done.

Such agreements may run the gamut from asking an employee to temporarily work part-time hours to the employee taking a certain number of hours of annual leave each week while business is slow. More often than not, employees will be willing to at least consider the practical realities of the situation.

Of course, you cannot agree to something prohibited by law, and if you are going to undertake temporary variations from full-time to part-time you will need to carefully document the details of this arrangement.

To explore these or any other options which may be available for your business, please call the NRA Legal team on 1800 572 679.