The Fair Work Commission (FWC) has sided with the operator of a recruitment business for accounting and finance roles in Australia and New Zealand, after the employer issued two JobKeeper directions, slashing employee hours significantly in response to poor business performance.
Referring to the employer’s decision as “reasonable”, the FWC explained that the company has been severely impacted by the COVID-19 pandemic, with “significant losses” expected in June, resulting in negative cash flow.
Commissioner Platt explained that under JobKeeper amendments to the Fair Work Act, an employer that qualifies for the scheme and becomes entitled to JobKeeper payments may “require an employee not to work on a day they would usually work, work for a lesser period on a day, or work a reduced number of hours overall”.
According to the FWC, the employer in question followed the requirements, having met the consultation and notice period prescribed by the act.
The case, which took place in early June but was only made public on Monday, saw an employee, part of the directorship team, challenge the employer’s decision on the grounds that he, as the sole income earner, would be unable to provide for his family following a 71.5 per cent pay reduction.
The employee was first issued a JobKeeper direction on 1 April, which saw his hours reduced to 65 per cent of the pre-pandemic arrangements. However, the applicant’s dispute with his employer was not about this direction.
The employer gave the applicant another direction on 3 June to reduce his hours of work to 12 per week, or a 71.5 per cent reduction to his pre-COVID-19 arrangements.
Aside from arguing that his current remuneration of $3,558.75 per month could not support his family, the senior employee also contended that 12 hours per week would not be sufficient to meet his role requirements.
While Commissioner Platt did accept that the financial impact of the second direction on the applicant is significant, he decided that the direction was reasonable within the meaning of section 789GK of the Fair Work Act 2009.
“Having determined that the ‘JobKeeper enabling direction’ is reasonable within the meaning of s.789GK of the act, I must dismiss the application,” the commissioner said.
Last month, the FWC sided with an 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 company’s “economic position”.
This provision has become one of the most contentious, giving rise to numerous FWC cases around what constitutes a reasonable excuse for refusing to take leave.
While the amendments to the Fair Work Act require employees 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 differs for full-time and part-time workers.