Last week the Federal Court of Australia found in favour of QANTAS to stop paying personal leave to its employees during a stand-down period. The Court agreed with QANTAS’ argument that the employees could not perform any work and therefore, had no work to be absent from; leaving the employees no reason to apply for personal leave.
In accordance with the Fair Work Act s.524 an employer is not required to make payments to an employee during a period of stand down. Unless the employee is on paid leave that is authorised by the employer which overrides the unpaid stand down for the duration of the authorised leave. This would also include paid personal leave (sick, carers leave). The Federal Court’s decision to allow QANTAS to no longer honour paid personal leave during the stand down period now means employees are unable to receive payment from their employer for any personal leave during such a period.
However, employees will still be able to access their annual leave or long service leave entitlements during a stand down period which may become very confusing for both employees and employers. Some may even ask why they can receive payment for either annual leave or long service leave when the Federal Court has agreed with QANTAS that there is no work to be absent from? Of course, these types of leave would require the employer to approve the leave prior to being eligible for them.
What does this now mean for employees?
Employees who may have long term illness/injury will now not be eligible to payment from their personal leave entitlements if their employer is in a period of stand down. This could cover employees who may be going through serious health issues such as cancer, recovering from heart attacks, caring for family members who are gravely ill or even somebody recovering from a serious injury. Employees may consider this decision unfair, especially if they have been with an employer for a long time and have accrued enough hours to cover for their absence underpaid personal leave.
The relief for these employees is the current JobKeeper scheme which allows employees to receive $1500 per fortnight during a stand down. The JobKeeper scheme is in place until 27th September 2020, unless extended or suspended prior to that date by the Federal Government.
The Federal Court’s decision will now mean that employers may refuse all other types of leave applications that come in. So, once JobKeeper payments stop, employees on any future stand down notices from their employer may not receive any type of paid leave at all as employers may not want to authorise any other paid leave type.
If you are unsure how this may affect your business or your employees, contact our HR specialists at Key Business Advisors who will be able to provide you with further guidance around this issue.