Employment & Safety Update – 18 June 2020

First Fair Work Commission decision dealing with request for employee to take annual leave under JobKeeper

Overview

The Fair Work Commission (FWC) has recently handed down a decision in an application to deal with a dispute in relation to JobKeeper, finding that an employee had unreasonably refused the employer’s request to take annual leave.

The decision in McCreedy v Village Roadshow Theme Parks Pty Ltd should give employers hope that the FWC is prepared to give effect to the JobKeeper enabling provisions of the Fair Work Act and will take a practical approach when considering the reasonableness of a request to take leave.

Importantly, the size or “resources” of the employer are not likely to be considered when assessing the reasonableness of the employee’s refusal – increasing the utility of the scheme to employers.

JobKeeper and the Fair Work Act – a recap

In April, amendments were made to the Fair Work Act to enable the “JobKeeper” scheme to be implemented. To refresh on those amendments, our previous article can be accessed here.

One of the amendments included the ability for employers to request employees to take annual leave, so long as the annual leave balance does not fall below 2 weeks. The amendments provide that employees must not unreasonably refuse such a request.

Facts

Mrs McCreedy has been employed by Village Roadshow Theme Parks Pty Ltd (Village) for approximately 22 years and works part time (around 30 hours per fortnight typically on a two days per week basis). Mrs McCreedy was stood down from her duties when COVID-19 restrictions forced Village to close its theme parks.

Whilst at work, Mrs McCreedy typically earned around $375 per week. This was increased to $750 per week when the JobKeeper scheme was introduced.

On 29 April 2020, Village issued a letter to Mrs McCreedy (and other employees) which included a request that employees use their annual leave entitlements subject to maintaining a minimum of two weeks’ leave in the account balance. The request asked employees to take one day of annual leave per week. At the time, Mrs McCreedy had a balance of about 18 weeks’ paid leave, comprised of a combination of accrued annual leave and long service leave.

She refused the request on the basis that she had five holidays planned over the coming months and into 2021 and was intending to use her accrued annual leave for that purpose. She wrote to Village setting out why she had refused the request.

Village in turn responded to Mrs McCreedy to the effect that her refusal to agree to take leave was denied.

Mrs McCreedy applied to the FWC to deal with the dispute.

Outcome

FWC found that it was unreasonable for Mrs McCreedy to refuse Village’s request that she take annual leave.

In reaching that view, FWC found that:

  • The question is not “was the request to take leave reasonable” – rather, the issue is whether or not the employee had unreasonably refused the request. Nevertheless, the request was found to be reasonable in the context where Village was unable operate its business into the short-term future, and it was looking to reduce its annual leave liability.
  • Mrs McCreedy had already booked a number of holidays, including booking flights and a holiday more than 12 months into the future, without first having received approval for the relevant annual leave. This was contrary to Village’s annual leave policy.
  • That even if her annual leave balance was reduced to two weeks, Mrs McCreedy would still not be without access to any paid leave for her planned holidays, as she could access long service leave, or make a request to take annual leave in advance.
  • The fact that Village was a very large employer was not a relevant consideration. The JobKeeper amendments to the Fair Work Act are intended to apply to all employers covered by the Act.
  • It was also not relevant that Mrs McCreedy was receiving “top up” pay of approximately $375 per week on account of receiving the JobKeeper payment.

Conclusion

While the decision obviously turns on its own facts, it shows that where disputes arise, FWC should give effect to the intention of the JobKeeper amendments – which was to allow employers affected by COVID-19 additional flexibility to deal with the financial impact of the pandemic.

If you have any queries or would like further information about this article, please contact:

Brett Cassidy
Principal
M: 0438 368 053
E: bcassidy@pageseager.com.au

Joe Mullavey
Senior Associate
M: 0416 794 061
E: jmullavey@pageseager.com.au

Published: 18 June 2020

Copyright © 2020 Page Seager. Privacy Statement Privacy Policy