Are employees entitled to access paid personal/carer’s leave or compassionate leave whilst being lawfully stood down?
Generally, no, they are not.
In a recent decision likely to be a relief to many employers, the Federal Court has dismissed claims brought by several Unions against Qantas that employees are entitled to access paid personal or compassionate leave during their stand down.
Importantly, the decision only examined stand down directions made pursuant to section 524 of the Fair Work Act 2009 (Cth) (FW Act) or a relevant Qantas enterprise agreement. However, the reasoning can be expected to apply equally to JobKeeper enabling stand down directions, as the relevant wording considered by the Court is in the same terms as the recent JobKeeper FW Act amendments.
The dispute came before the Court in late April 2020, following a decision by Qantas to deny employees access to personal and compassionate leave whilst they are stood down by the company due to a stoppage of work caused by COVID-19.
Qantas maintained that the entitlement to such leave is an entitlement of an employee to take leave from otherwise performing work they are required to perform. As there was no work for stood down employees to perform, there was no requirement to continue paying the leave.
The Unions challenged Qantas’ position, relying amongst other things on section 525(b) of the FW Act, which provides that an employee is not taken to be stood down during a period when they are “otherwise authorised to be absent’ from their employment.
The Unions submitted that an employee who takes personal or compassionate leave is ‘authorised to be absent’ within the meaning of section 525(b), has therefore not been stood down and is entitled to the paid leave.
The Court concluded that whatever the source of the claimed leave entitlements (be it under the FW Act or the relevant Qantas enterprise agreements) the Unions’ claims failed on a proper analysis of the terms, object and purpose of the relevant leave and stand down provisions.
Object and purpose of the right to stand down employees
The Court examined the principles relevant to the lawful stand down of employees, recognising that any right of an employer to stand down an employee without pay is to be found in either legislative provisions or the terms of an industrial agreement.
The Court accepted the submissions of Qantas that the two principal purposes of the stand down power (whether under section 524 of the FW Act or under an enterprise agreement) were to:
- provide “financial relief” to an employer from paying wages in circumstances where, through no fault of its own, the employer has no work that the employees can usefully perform; and
- protect the employees from what would otherwise flow from the termination of their services.
Object and purpose of personal and compassionate leave entitlements
The Court also considered the FW Act provisions conferring the entitlements to personal and compassionate leave. It concluded that the object and purpose of those entitlements is to:
- serve as a ‘form of income protection’; and
- allow employees to take leave when they would otherwise be required to perform work.
In relation to the leave entitlements conferred by the Qantas enterprise agreements, the Court also considered that the terms of those particular provisions were consistent with the leave entitlements being a form of income protection, as per the FW Act entitlement. Indeed, the Court cautioned that, in the absence of clear language in an enterprise agreement, a departure from the entitlement provided by the FW Act should be resisted.
Having considered the intersection of these matters, the Court agreed with Qantas’ position, finding that where an employee has been lawfully stood down in circumstances where there is no work for the employee to perform and thereby derive income, an employee is not entitled to access personal or compassionate leave.
The Court observed that to do so would go against the object and purpose of those entitlements -namely to be relieved from the work which the employee was otherwise required to perform. Conversely, to expose the employer to a liability to pay leave entitlements after lawfully standing down their employees would defeat one of the two principal purposes of stand down – namely to protect the employer against such claims.
Finally, the Court found that the Unions’ reliance on section 525(b) of the FW Act did not alter its conclusion. It found the preferable construction of that section is directed to those circumstances where the provisions of the FW Act ‘authorise’ or ‘entitle’ an employee to be absent from their employment – such as: sections 108 (eligible community service activity), 111 (jury service), and 114 (public holidays).
A reminder to employers
For most employers, the question of whether personal or compassionate leave may be accessed by staff in circumstances of stand down has been determined in the negative by this decision. However, there may be employers for whom the terms of their relevant industrial agreement could result in a different outcome.
Accordingly, before denying any stood down employee access to personal/carer or compassionate leave, employers are encouraged to clarify the source and terms of the leave entitlements and to seek advice.
The information in this article is for information purposes only and does not constitute legal advice. You should obtain specific advice relevant to your circumstances.