Pandemic Leave: A COVID-19 Initiative from Fair Work Commission

In these unprecedented times, on 1 April 2020, the Fair Work Commission (the Commission) has released a statement setting out its provisional views regarding the variation of 103 modern awards to provide an entitlement to unpaid pandemic leave and the flexibility to take annual leave at half pay. Currently, the Commission has proposed that these variations would operate until 30 June 2020. These proposed variations are purely additional measures during the COVID-19 pandemic.

A copy of the Statement from the Commission can be accessed here.

The variations are proposed on the Commission’s own initiative pursuant to Section 157(3) of the Fair Work Act 2009 (Cth) (the Act). These proposed variations being made to the modern awards do not preclude any current variations on foot.

It is noted that Full Benches of the Commission have recently varied the Hospital Industry (General) Award 2010, the Clerks Private Sector Award 2010 and the Restaurant Industry Award 2010 as set out in our article which can be accessed here. For these awards, the proposed variations are additional.

Purpose of Fair Work Commission Initiative

As everyone would be well aware, the effect of COVID-19 has had adverse impacts across many industries. One of the key purposes of this variation to these Awards is that it has been identified that there is a ‘regulatory gap’ in modern awards in the current circumstances. Specifically, employees who have contracted COVID-19 may have an entitlement to paid personal/carers leave under the National Employment Standards (NES). However, certain employees’ ability to access personal/carers leave due to a period of self-isolation may be limited because of the following factors:

• the entitlement to paid personal/carers leave does not apply to casual employees;
• the NES entitlement is to 10 days paid leave for each year of service, and it is likely that a significant proportion of employees will have used some of their entitlement and may have less than 10 days paid leave available;
• as the NES entitlement increases progressively during a year of service, hence employees with less than 12 months service will have entitlement to less than 10 days paid leave; and
• under the NES an employee may take paid personal leave if the leave is taken ‘because the employee is not fit for work because of personal illness’. However, an employee may be required to self-isolate because they have been exposed to someone infected with COVID-19, although the employee has not tested positive to COVID-19, is not displaying any symptoms and is not unfit for work because of personal illness.

Some employees required to self-isolate may be able to access paid or unpaid leave. For most employees, this will depend upon reaching an agreement with their employer. However the gap in the current modern awards is that if an employer does not consent, the employee may be placed in the unfair position of either contravening public health directions or guidelines, or placing their employment in jeopardy.

The Commission has also identified that there are gaps in respect of employees being protected from termination due to COVID-19. Noting that unfair dismissal protections are limited to employees protected from unfair dismissal pursuant to the meaning of Section 382 of the Act. A wider range of employees may be protected from dismissal under the general protections provisions in the Act if they have actually contracted COVID-19.

However, for the purposes of general protections, Section 352 of the Act provides an employer must not dismiss an employee because the employee is temporarily absent from work because of illness or injury of a kind prescribed by the Regulations. The Commission has stated it appears that the protection against dismissal pursuant to Section 352 of the Act may not apply to an employee required to self-isolate because they have been exposed to someone infected by COVID-19, if the employee has not tested positive to COVID-19, or is not displaying any symptoms and is not unfit for work because of personal illness.

It is also important to note that in making the statement, the Commission sought an expert report from Professor Borland (Economics) of the University of Melbourne which sets out that there is a benefit from allowing extra flexibility in employment arrangements. While there has been a significant decrease in demand for labour, once a reversal occurs, Professor Borland states that it will be more valuable for employers to retain an already trained employee and not to have to search for a new worker.

Proposed Variation to Awards

The two additional measures in the schedule are unpaid pandemic leave and the ability to take twice the amount of annual leave at half pay. The proposed clauses are proposed to be inserted into a new schedule. The proposed clauses are as follows:

“X.2.1 Unpaid pandemic leave

(a) Subject to clauses X.2.1(b) and (c), any employee may elect to take up to 2 weeks’ unpaid leave if the employee is required, by government or medical authorities or acting on medical advice, to self-isolate or is otherwise prevented from working by measures taken by government or medical authorities in response to the COVID-19 pandemic in circumstances where the employee is required to work at premises operated by an employer.

(b) The employee must give their employer notice of the taking of leave under clause X.2.1(a) and of the reason the employee requires the leave, as soon as practicable (which may be a time after the leave has started).

(c) An employee who has given their employer notice of taking leave under clause X.2.1(a) must, if required by the employer, give the employer evidence that would satisfy a reasonable person that the leave is taken for a reason given in clause X.2.1(a).

(d) Leave taken under clause X.2.1(a) does not affect any other paid or unpaid leave entitlement of the employee and counts as service for the purposes of entitlements under this Award and the National Employment Standards.

NOTE 1: A employee covered by this Award who is entitled to the benefit of clause X.2.1 has a workplace right under section 341(1)(a) of the Act.

NOTE 2: Under section 340(1) of the Act, an employer must not take adverse action against an employee because the employee has a workplace right, has or has not exercised a workplace right, or proposes or does not propose to exercise a workplace right, or to prevent the employee exercising a workplace right. Under section 342(1) of the Act, an employer takes adverse action against an employee if the employer dismisses the employee, injures the employee in his or her employment, alters the position of the employee to the employee’s prejudice, or discriminates between the employee and other employees of the employer.

NOTE 3: Under section 343(1) of the Act, a person must not organise or take, or threaten to organise or take, action against another person with intent to coerce the person to exercise or not exercise, or propose to exercise or not exercise, a workplace right, or to exercise or propose to exercise a workplace right in a particular way.

X.2.2 Annual leave at half pay

(a) Instead of an employee taking paid annual leave on full pay, the employee and their employer may agree to the employee taking twice as much leave on half pay.

(b) Any agreement to take twice as much annual leave at half pay must be recorded in writing and retained as an employee record.

EXAMPLE: Instead of an employee taking one week’s annual leave on full pay, the employee and their employer may agree to the employee taking 2 weeks’ annual leave on half pay. In this example:

• the employee’s full pay for the 2 weeks’ leave is the same as the pay the employee would have been entitled to for 1 weeks’ leave on full pay (including leave loading under the Annual Leave clause of this award); and

• one week of leave is deducted from the employee’s annual leave accrual. (Underlining added).

NOTE 1: A employee covered by this Award who is entitled to the benefit of clause X.2.2 has a workplace right under section 341(1)(a) of the Act.

NOTE 2: Under section 340(1) of the Act, an employer must not take adverse action against an employee because the employee has a workplace right, has or has not exercised a workplace right, or proposes or does not propose to exercise a workplace right, or to prevent the employee exercising a workplace right. Under section 342(1) of the Act, an employer takes adverse action against an employee if the employer dismisses the employee, injures the employee in his or her employment, alters the position of the employee to the employee’s prejudice, or discriminates between the employee and other employees of the employer.

NOTE 3: Under section 343(1) of the Act, a person must not organise or take, or threaten to organise or take, action against another person with intent to coerce the person to exercise or not exercise, or propose to exercise or not exercise, a workplace right, or to exercise or propose to exercise a workplace right in a particular way.”

It is important to note that the proposed unpaid pandemic leave entitlement is drafted such to strike a balance between the various interests of both employer and employee, specifically pandemic leave;

• will be available in full immediately, rather than accruing progressively;
• only available until 30 June 2020 unless extended by further variation due to the COVID‑19 pandemic;
• available to full-time, part-time and casual employees (not pro-rata); and
• it will not be necessary for employees to exhaust their paid leave entitlements before accessing unpaid pandemic leave.

In respect of the ability for an employee to take twice as much annual leave at half the rate of pay, it is to provide additional flexibility in respect of annual leave. It is important to note the clause is drafted such that there is a record of the agreement in order to protect the interests of both employer and employee and to minimise the risk of any subsequent dispute. Further, employers are still required to ensure that there is an appropriate record of employee’s leave entitlements.

Next Steps

Importantly, the Commission in making its statement took into consideration the Commonwealth stimulus packages including the recent proposed JobKeeper payments. The Commission has sought for the Government to clarify whether an employee will still be able to access JobKeeper payments if they are on unpaid pandemic leave.

Any person interested in wishing to respond to the provisional views of the statement is to provide a written submission to the Commission by 4.00pm on 6 April 2020. If no submissions are received opposing the provisional views, the variations will be determined without a hearing. If a submission is received opposing provisional views, there will be a hearing set for 2.00pm on 8 April 2020 via telephone. Should you wish to make any submissions please advise and we can assist accordingly.

We will keep you up to date as this matter progresses. It is important that employers are aware of these on-going developments as it will affect the management of staff covered by any of the applicable modern awards.

For more specific information on any of the material contained in this article please contact Sathish Dasan on 8210 1253 or sdasan@normans.com.au or Lincoln Smith on 8210 1203 or lsmith@normans.com.auor Ganesh Krishnan on 8217 1395 or gkrishnan@normans.com.au.