ARTICLE
20 January 2021

Update to the Qantas JobKeeper Case

Qantas successfully appealed the decision, and the unions are now seeking special leave to appeal to the High Court.
Australia Employment and HR

In October 2020, we discussed the "Qantas JobKeeper Case" and noted that Qantas was considering whether to appeal the decision. Qantas successfully appealed the decision in December, and now the Unions are seeking special leave to appeal to the High Court of Australia (the "HCA").

1. Legislative background

To recap the legislative background of the matter, the Qantas JobKeeper Case concerns the interpretation of one of the temporary provisions introduced into the Fair Work Act 2009 (Cth) (the "FW Act") as part of the JobKeeper Scheme. Specifically, section 789GDA of the FW Act provides a minimum payment guarantee by which an employer must ensure that "(i)f a JobKeeper payment is payable to an employer for an employee for a fortnight", the total amount payable to the employee in respect of the fortnight is the greater of the JobKeeper payment amount ($1,500 initially and then subsequently reduced) or "the amounts payable to the employee in relation to the performance of work during the fortnight".

2. Arguments of the parties

Qantas argues that "the amounts payable to the employee in relation to the performance of work during the fortnight" means the amount that would ordinarily be payable by the employer to the employee during the fortnight in relation to the performance of work (the "Amounts Payable Construction").

The Unions argue that the phrase is referring to the amount that was earned by the employee in relation to the performance of work during the fortnight (the "Amounts Earned Construction").

As discussed, in our earlier article, and as observed in the majority decision, the different constructions lead to the same or different amounts being paid by an employer to an employee depending on the facts. For example, depending on the payment obligations in an employee's contract of employment or industrial instrument, overtime may be "earned" for additional work performed during the first fortnight of a month, but the overtime may only be "payable" to the employee at the end of the final fortnight of the month.

3. Updates to the Qantas JobKeeper Case and next steps

Two out of the three Federal Court judges that heard Qantas's appeal preferred the Amounts Payable Construction. Amongst other reasons, the majority considered that:

  • the language of section 789GDA is not clear and unambiguous (in contrast to the conclusion of the primary judge) and therefore the meaning of the provision involves a choice of constructions having regard to the text, context and purpose of the provision;
  • the balance of the extrinsic material is either consistent with or supportive of Qantas's construction;
  • to the extent possible, the phrase in section 789GDA(2) should be given the same meaning as is given to that same phrase in section 323(1) of the FW Act;
  • in common with section 323 of the FW Act, the source of the obligation to pay is in the contract or industrial instrument; and
  • it is only on Qantas's construction that the word "payable" takes its ordinary meaning of "liable or required to be paid".

PCS will actively monitor how the matter may progress through the HCA and provide you with updates to the Qantas JobKeeper Case. This is an important case to watch for affected organisations because the key section of the FW Act in dispute is a civil penalty provision, meaning that contraventions may result in pecuniary penalty orders.

Please contact the PCS team if you have any JobKeeper related questions. In particular, as organisations may be exposed to pecuniary penalties and back payments based on the HCA's construction of this clause, please let us know if you would like us to audit your organisation's payment practices proactively and determine whether those practices yield different results based on the Amounts Payable Construction and the Amounts Earned Construction.

See the full decision here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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