The Federal Court has recently rejected a union claim 1 that employees of
On
Companies with stood-down workforces will be relieved as the Federal Court has ruled out what would have been an additional financial burden for employers during this period of economic distress.
Ultimately the Federal Court confirmed sick leave operates as a form of a wage protection. Without any payment of wages or performance of work during a stand down, the Federal Court determined there is no entitlement to this protection - a much-needed clarification in this COVID-19 environment.
Background
In
The Communications, Electronical, Electronic
The Unions sought orders confirming stood-down employees can access their paid personal/carer's leave or compassionate leave during the stand down period.
Judgment
In rejecting the Unions' claims, the Federal Court relied on the principal purposes of standing down employees as well as the object and purpose of leave entitlements under the Act.
Federal Court
The Federal Court found the purpose of the paid personal leave entitlement was to operate as a form of wage protection and not a source of income.
Applying the Full Federal Court's 2019 decision of
Therefore employees cannot access paid personal leave during a stand down as there is no work to be performed, no entitlement to wages and therefore no reason for the wage protection achieved through paid personal leave to operate.
The Federal Court found that requiring employers to pay leave entitlements would be contrary to the purpose of standing down employees in the first place as employers would no longer have the financial relief of lawfully standing down employees.
The Federal Court rejected the Unions' submission that by taking personal leave employees would be authorised to be absent from their employment under section 525 of the Act. The Unions submitted
The Federal Court found the correct interpretation of section 525 of the Act was that employees would not be considered stood down if they were taking leave authorised at their employer's discretion, or if the employee was absent from work due to a recognised exemption under the Act like jury service, public holidays or community service.
Furthermore, the Federal Court found that
The Unions sought to rely on the relevant enterprise agreements as a basis for accessing paid personal leave during a stand down. However, the Federal Court found there would be no different conclusion if the basis for standing down employees was under the Act or under the relevant enterprise agreement.
Flick J found the stand down provisions contained in the enterprise agreements did not have a different object or purpose to the stand down provisions of the Act. The Federal Court found that, without any clear language to justify a different course of action, any departure from the Act's accessing paid leave provisions should be resisted.
Lessons for employers
The Federal Court's decision is a helpful explanation for the operation of the Act's stand down provisions and the obligations employers owe to stood-down employees. Whilst the lawfulness of a stand down will depend on the individual circumstances of each organisation, this judgment provides support for employers seeking to manage their operations while a stand down is in operation.
Footnote
1
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.
Mr
Holding Redlich
Level 65
NSW
2000
Tel: 39321 9999
Fax: 39321 9900
E-mail: inquiries@holdingredlich.com.au
URL: www.holdingredlich.com.au
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