The Fair Work Commission (FWC) has sided with the employer, who ordered a retail worker to take paid annual leave on the basis of one full day’s leave per week for the next four months to safeguard the Swedish clothing store’s “economic position”.
Referring to the employee’s refusal to take leave as “unreasonable in the circumstances”, the FWC explained that under the government’s $70 billion JobKeeper package, employers “can now direct that paid annual leave be taken even if employees do not have an excessive leave accrual”.
Also, under JobKeeper guidelines, “employees must not unreasonably refuse the request”.
This provision, however, has become one of the most contentious, giving rise to numerous FWC cases around what constitutes a reasonable excuse for refusing to take leave.
Under JobKeeper amendments to the Fair Work Act, while employees are required to consider an employer’s request to take leave, employers aren’t allowed to run down an employee’s leave balance below two weeks.
However, this also differs for full-time and part-time workers.
In the most recent case, Commissioner McKinnon explained that “the need to support business continuity and job security for all employees outweighs the inconvenience” caused to the disgruntled employee.
The case, which took place in early May but was only recently published by the FWC, saw the part-time employee in question, working 2.5 days a week, refuse to take leave a few days after recommencing the job.
She was initially stood down from 2 April until the first weekend of May 2020, when the store at which she works in Brisbane reopened.
Following its reopening, H&M, which is receiving the government’s fortnightly wage subsidy, has asked all of its permanent employees to take paid annual leave so it can reduce its contingent liabilities and “support” its overall financial position in response to the pandemic.
Noting that, ordinarily, the taking of annual leave would be a matter for agreement between the employer and employee, the FWC explained that this position has been modified somewhat in response to the COVID-19 pandemic.
The commission judged that H&M is “doing what it can” to keep as many people as possible employed.
“The company’s financial position has been significantly affected in recent months, not only to the level which makes it eligible for the JobKeeper scheme, but in some periods by up to 80 or 90 per cent,” Commissioner McKinnon said, adding that as such, the employee is being ordered to take the leave, deemed necessary under the circumstances.
“The company is now gradually looking to resume trading but expects that it will take some time for the situation to turn around.”