The Fair Work Commission has set aside a JobKeeper enabling stand down direction, believed by an employee to be motivated by a 'work from home' request.
The decision highlights that a reduction of an employee's hours must not be unreasonable in all of the circumstances and that employers must consult with employees in accordance with the Fair Work Act 2009 (Cth) (FW Act) before giving JobKeeper directions.1
Mr Wilfred Lam (Employee) was a full-time employee in the Support Team at Mobile Technologies International Pty Ltd (MTI), a supplier of equipment used in the transport industry. The Employee's role consisted of dealing with customer enquiries.
On 29 June 2020, the Employee made a 'work from home' request to MTI. This request was made in light of the COVID-19 restrictions in Victoria, which the Employee understood required him to work from home, and the Employee's increased risk to COVID-19 due to on-going medical issues. On 31 July 2020, the request was approved by Mr Darren Borg, MTI's Chief Operating Officer, and the Employee began working from home.
On 4 August 2020, a human resource manager from A2B Australia Ltd, MTI's parent company, contacted the Employee to inform him that the request had been reviewed and was refused. The Employee challenged the refusal and reiterated his reasons for the request. MTI alleged their office complied with COVID-19 standards and that the Employee could not perform all of his duties from home.
On 7 August 2020, only hours after the Employee gave notice of his eligibility for JobKeeper payments, a senior executive from A2B Australia Ltd issued a stand down direction to the Employee (Direction). The Employee was stood down to zero hours per week and the Employee's pay of $1,961 a fortnight (plus commission) was reduced to the $1,500 a fortnight JobKeeper payment.
The Employee argued he had been treated differently to other employees in the Support Team as he made a 'work from home' request and challenged the senior manager's decision to refuse the request. MTI argued there was no connection between the Direction and the 'work from home' request and the Direction was given as MTI could not usefully deploy the Employee.
Commissioner Wilson was satisfied the Direction was authorised under section 789GDC(1) of the FW Act. However, Commissioner Wilson took issue with the reasonableness of the Direction (section 789GK of the FW Act) and the failure of A2B Australia Ltd or MTI to meet the statutory consultation obligations (section 789GM of the FW Act).
Was the stand down direction reasonable?
Stand down directions must not be unreasonable in all of the circumstances, meaning they must not be inequitable, unfair or unjustifiable.
Commissioner Wilson was not convinced the Direction was unreasonable because it was connected to the Employee's work from home request.
However, in light of the working arrangements of the other employees in the Support Team, Commissioner Wilson found the Direction to reduce the Employee's hours to zero unreasonable. Of these employees, only the Employee had his hours reduced to zero hours per week. Two employees had only a minor reduction to their hours and three employees had no change to their hours.
MTI attempted to justify these arrangements by relying on a 'Stand Down Selection Matrix' (Matrix). The Matrix gave each employee in the Support Team a score based on six criteria to decide who would be affected by the stand down and to what degree. The Employee was ranked second lowest.
Despite the use of the Matrix and evidence of a downturn in business due to COVID-19, Commissioner Wilson found the Direction was unreasonable as hours were unfairly and disproportionately reduced among the employees.
Failure to consult
Commissioner Wilson highlighted the unambiguous consultation requirements in section 789GM of the FW Act, which oblige employers to:
- give written notice of an intent to stand down
- give written notice at least three days prior to the direction being given (unless a shorter period is agreed)
- consult with the employee about the direction
- keep a written record of the consultation.
There was no evidence any of these requirements were met by A2B Australia Ltd or MTI.
Commissioner Wilson set aside the Direction. In recognising a stand down direction of some kind was appropriate in light of the significant decline in business, Commissioner Wilson substituted the Direction with a new stand down direction that the Employee's hours be reduced to 28.5 hours per week.2 This was considered by Commissioner Wilson to be fair in light of the skill sets of the other employees in the Support Team and the employees who already had a reduction in hours.
A finding could not be made on the work from home request as neither party adduced evidence to support their claims (this was not relied upon for the purposes of the hearing). Instead, Commissioner Wilson set down a formal 'recommendation' that the parties consult on the issue, which included the exchange of information relating to the Employee's medical condition and duties the Employee could perform from home.
Lessons for employers
An authorised JobKeeper enabling stand down direction is unlawful if it is unreasonable. Employers must ensure that a reduction in hours is not excessive and is proportionate to other employees in the same team, keeping in mind differing skill sets.
Employers must also ensure consultation obligations are met. A failure to provide an employee with an opportunity to respond may provide a basis for an employee to challenge a stand down direction.
Employers should always keep in mind the overarching purpose of the COVID-19 provisions in the FW Act, which includes helping employees remain productively employed and contributing to the operations of the business.
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.