[2020] FWC 5231

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.526—Stand down

Madeline Irvine
v
Perspective Recruitment Pty Ltd T/A Perspective Recruitment
(C2020/4855)

DEPUTY PRESIDENT BOOTH

SYDNEY, 2 OCTOBER 2020

Application to deal with a dispute involving stand down – stand down pursuant to s.524 not available – order for purported stand down to cease.

Introduction

[1] On 22 June 2020, Ms Madeline Irvine made an application to the Commission pursuant to s.526 of the Fair Work Act 2009 (the FW Act) for the Fair Work Commission (FWC) to deal with a dispute in relation to an alleged stand down by Perspective Recruitment Pty Ltd (Perspective). Ms Irvine contends that she was stood down without pay since 30 March 2020 in contravention of s.524 of the Act.

[2] Perspective contends that although it initially used the term “stand down” the term was used loosely, and it did not stand down Ms Irvine pursuant to s.524 of the Act. Rather Ms Irvine’s hours of work were reduced by agreement in the face of a loss of clients occasioned by COVID-19.

[3] The application was listed for two conferences before me on 6 July 2020 and 13 July 2020. The dispute was not resolved at these conferences and on 22 July 2020 Ms Irvine requested that the matter be listed for arbitration. Directions were issued for the filing and service of materials on 30 July 2020 and the hearing was conducted by Microsoft Teams on 4 September 2020.

[4] Ms Irvine was self-represented and gave evidence on her own behalf. Perspective was represented by Ms Elaine Parker Financial Controller and HR Representative. Ms Parker gave evidence on behalf of Perspective.

Factual circumstances

[5] Perspective provides casual labour hire and recruitment services to various industries including food, retail, travel and manufacturing. Perspective experienced a downturn in work occasioned by COVID-19 commencing in March 2020 but could not access the JobKeeeper scheme. This was because the turnover test could not me met. Perspective’s business model resulted in high turnover with low margins in the retail sector, where no downturn was experienced, and a loss of clients in the travel and other sectors where Perspective had lower turnover but received higher margins for its services.

[6] Ms Irvine commenced employment with Perspective in October 2016 as a casual employee. In July 2017 she became a permanent part time employee working for 20 hours per week over 4 days as an administration/marketing coordinator. Her work was directed towards that section of the business that experienced the most loss during COVID-19 period.

[7] From mid-March 2020 Ms Irvine commenced working from home by agreement due to COVID-19 restrictions. 1

[8] Ms Irvine gave evidence that on 26 March 2020 she was informed that Perspective “would need to stand us all down” 2 in a Microsoft Groups Chat with work colleagues that included the business owners, Mr Hong Ngo and Ms An Ngo, and Ms Irvine’s manager Mr George Badrous.3

[9] Ms Parker contested this evidence and suggested to Ms Irvine that she might be confused. She gave evidence that a video conference was held on 3 April 2020 with Ms Irvine, herself and Ms Ngo in which she advised Ms Irvine that only 5 hours work per week would be available. She said that the term “stand down” was used in this video conference but that she now knows it was used “incorrectly” but that notwithstanding this “a full consultative process was undertaken with the Applicant in relation to a temporary variation of working hours and this variation was subsequently agreed to by the Applicant”. 4

[10] It is not necessary to resolve the contest between the parties as to whether the video conference was on 26 March 2020 and/or 3 April 2020.

[11] Ms Irvine says that 2 April 2020 was her last day of work in the office. She says that she was told not to come in on her next work day, 3 April 2020, and was “stood down for all hours without further notice, with the possibility of 1 day a week if [she] didn’t qualify for Jobseeker or if working 1 day a week didn’t affect any benefits [she] may be eligible for”. 5

[12] Perspective Recruitment submits that the Applicant at no time suggested she was unhappy with the arrangements or the process discussed. It says that the result of the video conference was “an agreement between [it] and [Ms Irvine] that the arrangement for reduced hours and working from home would be further considered by the Applicant in light of the alternate possibility of becoming a JobSeeker recipient”. 6

[13] A series of emails over the course of 7 April 2020 that shed some light on this were tendered by Ms Irvine: 7

On Tuesday April 7 at 2.13pm from Ms Irvine to Ms Parker:

“Hi Elaine, hope you are well. Just wondering will you be sending out an official stand down letter with terms and conditions?”

On Tuesday April 7 at 2.44pm from Ms Parker to Ms Irvine:

“Hi Mads, I hope you are well. We will be doing this although we are currently awaiting the finalization (and passing through Parliament) of the Job Keeper scheme so that I can accurately assess any possible eligibility for PR. That information should be available on Thursday. If you particularly need something now I can do that. You might recall that you were to come back to me regarding approx. 1-day work per week after you discussed the stand down situation with Centrelink. Have you had a chance to do this? Particularly, we would not want to adversely affect any current entitlement you have to Government benefits. Cheers Elaine.”

On Tuesday April 7 at 10.58pm from Ms Irvine to Ms Parker:

“Hi Elaine, I’ve registered for it but I need to wait for Centrelink to get back to me with the next step. I’m not sure how long that will take. So maybe once you have information on Thursday just send out what you were going to send out based on the job keeper info, and we amend the one day thing after I heard from Centrelink if PR is unsuccessful with the job keeper scheme? Yeah? Good luck with it all.”

[14] Ms Irvine agreed that she investigated her JobSeeker eligibility.

[15] During this period an email sent to all staff by Ms Parker on 17 April 2020 at 2.40pm described the general situation pertaining to Perspective:

“Hi everyone, I hope that this finds you all keeping safe and well.

To confirm and update you on the current situation, we advise as follows:

1. All Sydney operations are currently being managed by George. George will continue at present on the basis of 4 working days each week but his hours will be spread across the whole 5-7 days as required.

2. At present, Madeline & Jacqui have unfortunately been stood down and Kris is currently on annual leave.

3. In relation to the JobKeeper subsidy, I can confirm that at present we do not meet the eligibility criteria to take part in the scheme. This is not because we have not suffered a downturn, but rather the way in which the downturn is currently being measured. The government are using GST turnover as part of their eligibility criteria, and I would agree that this is the best and possibly fairest measure at this point in time. With the spike in demand from Aldi stores we have temporarily seen an increase in our turnover although this is now returning to normal. Despite this, we have had a great many of our other clients close their operations as a result of the pandemic and the margin earned on placements with the majority of other clients is higher than that which is gained from the Aldi account. Hence our downturn, whilst not immediately evident in our turnover, is certainly present in our bottom line. With the spike in demand at Aldi evening out, we are expecting a decrease in turnover in the coming week and as a result of the evening out of demand at Aldi, there is insufficient work for additional staff and insufficient margin to sustain staffing levels above those currently in place.

4. Melbourne Office is staffed by some or all of myself, An, Hong & Lily, each Monday to Wednesday. All general client and candidate placement or related queries for Melbourne should be directed to Liem only, via email or mobile. An & Hong are available at all times by email and mobile.

Moving forward, we are able to re-assess our eligibility for JobKeeper on a month to month basis from now to September. We will continue to do this and, in the event that we are able to access the scheme, the current arrangements above will be reviewed. We will of course, also review the current arrangements with each staff member as the Government restrictions are lifted in due course, and our trading partners recommence.

The decisions made in recent weeks have been difficult ones, both for the employees concerned and for management. It is our hope that in reducing operations in both Sydney and Melbourne we will be able to continue to trade at whatever level is required of us throughout the current crisis, and be in a position to start a re-build towards pre-pandemic operations at the earliest possible time.”

[16] Ms Irvine’s enquiries in relation to her ability to obtain the JobSeeker payment took around five weeks and ultimately, she was informed that she was not eligible.

[17] Ms Irvine says that she “found out her application [for JobSeeker] had not been approved by Centrelink” on 18 May 2020 and that this is when she agreed to “take the 1 day that had been offered” by Perspective. Ms Irvine says her “hand was forced to accept the only thing available to me, whilst [she] was still looking to clarify what should be happening”. 8

[18] Perspective says that Ms Irvine advised of her ineligibility for JobSeeker on 12 May 2020 by email. Perspective says Ms Irvine wrote in the same email that she “was happy to discuss and put in place whatever hours [it] could offer her. 9

[19] Ms Irvine proceeded to work one five-hour day per week for the following three weeks.

[20] On 4 June 2020, the Applicant spoke with Perspective’s Sydney manager George Badrous over the phone, regarding concerns surrounding the stand down process and reduced hours. Ms Irvine emailed a summary of this call to Mr Badrous on the same day: 10

“Hi George

I know you said not to worry, but I was a little concerned that in my nervousness of having that conversation I may not have clearly conveyed what I was hoping to.

In a nutshell, I am wanting confirmation that the stand down and terms of stand down are as they should be. I am wanting to confirm that it is either appropriate or inappropriate to engage us in new terms of work hours without a new contract stating the terms & conditions.

In long form…

My main concerns are around our process. When being stood down I had to chase an official document, but even once I had one, it had no terms or conditions of that stand down.

If we are being stood down from our contracted hours, would we not need a new work contract stating the new terms and conditions of our employment to agree on?

I can see you were cc’d in on the email Elaine sent me, so you might have already read it, you can see, as she has admitted, it is a bit vague:

“For other admin staff, including yourself, this will be reviewed in an ongoing way depending on demand for your functions. For example, it is unlikely that we will be holding the annual Christmas party, but depending on what the restrictions are in Victoria moving forward, there may be something done for clients. Until this is known, we will not know what the marketing requirements are.”

I get that they may not know where everything is going to go, but as far as determining function, there is work to do, they want me to recreate the website, there is plenty to do. I am totally ok with Perspective needing to revise their need/priority for that function to continue, they need to make calls that are best for the business, but if it is the case that they need to do so, then should my contract of 4 days a week to do that function be made redundant? And a new contract be drawn up with how they would now like that position of ‘marketing’ to function and how they would like to engage me to do that function? At which point we would decide if that new opportunity works for both Perspective and myself?”

[21] Mr Badrous directed Ms Irvine’s queries to Ms Parker. 11 Ms Parker wrote to Ms Irvine on 5 June 2020 to arrange a video conference for 9 June 2020. The video conference was held and also included Ms Ngo. During this call Ms Irvine says she “reiterated her concerns that [she] had brought up with [Mr Badrous]”12 and information that she had found regarding payment for public holidays and accrual of leave during periods of stand down.

[22] Ms Irvine says she “reiterated that [she] wanted clarity around the stand down, and information on possible scenarios and the terms and conditions and options that went with each scenario”. 13

[23] Ms Parker sent an email to all staff on 9 June 2020 which included three possible scenarios moving forward, with commentary on their likelihood:

“Hi everyone, we hope you all continue in good health.

Following my last email updating you on our position regarding the JobKeeper program and moving forward in general, I have received some queries in relation to the current stand down situation and the plan to move forward. You will all appreciate that it is difficult to put a time frame to any moves towards returning to work but we certainly do understand concerns around possible scenarios should we be unable to enter the JobKeeper program. Please find below three possible scenarios canvassed recently and, in italics, our view on each of those scenarios:

1. The current stand down situation to continue indefinitely as at this point in time: Unlikely. We certainly hope that the current situation will not continue indefinitely, nor do we expect that it will. In line with Government expectations, we are hopeful that the economy will be fully operational again by the end of September.’

2. A staggered return to work and to the workplace of all pre-Covid 19 staff in line with the terms and conditions of their existing contracts of employment: Most likely. It is currently our intent to have all staff return to the workplace under their existing contract hours post Covid-19. While the timing is uncertain, it is highly likely that the return will be staggered, both in terms of the number of staff and the hours of work, however this is not likely to commence until after the end of July/August. We are looking for as swift a return of all staff to full hours as soon as feasible.

3. A new staffing model based on terminations, or the renegotiation of contracts to alter and possible [sic] reduce the current terms and conditions of employment. Least likely. Should the economy show no signs of recovery by the end of September, scenario 3 may need to be considered however I must emphasis that there are currently no plans for the termination of any staff, nor for the renegotiation of existing contracts to lesser hours or conditions.

I hope this provides some clarity on the current situation. As previously advised, if we are successful in gaining entry to JobKeeper you will be advised immediately and details of the impact of the program can be discussed at that time.” 14

[24] Ms Parker confirmed to Ms Irvine via email on 11 June 2020 that personal leave and annual leave entitlements continued to accrue for the duration of the stand down based on the Applicant’s pre-stand down hours of 20 hours a week. 15

[25] On 15 June 2020 Ms Irvine emailed Ms Parker of Perspective to say: 16

“Thanks for sending the email last week, after our phone call prior to the email I was still struggling to understand some aspects of the stand down and return to work. I looked into it a bit further to try and get a better understanding and more clarity…

…

I’m figuring our stand down is due to the third option ‘stoppage of work’, but we don’t fall under the general rule of natural disaster or machine breakdown, and my contract doesn’t have terms for stand down, so I’m figuring it’s a covid based new thing. DO you have a link to the info our stand down is legitimized by, so I can look at the info give [sic] there?

…

You have offered me 1 day a week, I know it was with kind intentions to help me out financially, but it would seem if there is work for me to do, wouldn’t that mean I can in fact be ‘usefully employed’? If you could explain how that works, that would clarify that for me. And if it is a breach of the stand down to have me working a day, let me know and I will discontinue, and wait until the stand down is over if that is the correct thing to do.”

[26] Ms Parker responded to Ms Irvine on the same day to say: 17

“You are correct that the stand down is as a result of the stoppage of work outside the control of the employer, under the provisions of the Fair Work Act for businesses adversely affected by COVID-19. Particularly, in relation to you, your duties relate to marketing, promotions and online services. All work in this field has stopped following the closure of some clients, the severely restricted activities of others and the inability to plan and/or schedule the usual marketing activities and promotions.

…

With a stoppage of work, we are required to look at any other functions within the business to ascertain if alternate duties can be provided. Clearly in the current situation, we do not have alternative duties to offer. Any duties which are still being carried out are, as required, being shared with the appropriate staff working reduced hours as a result of that sharing. Unfortunately, you are not suitably skilled to undertake the finance and accounts duties which currently remain within the business. Whilst you may have gained some recruitment skills at Perspective, recruitment services have stopped as there is no current demand.

While you may see that there is plenty of work for you to do, with many clients not operating it has been decided that all business development attempts are unlikely to yield any results in the current situation. As such, it was determined that it was not financially viable for this work to continue. Despite this, one day per week was subsequently offered to you for website development. We have stressed in each discussion that this was a means of making some attempt to help you financially in an interim period, despite being contrary to my advice to [the directors] from a business financial viewpoint. There has been no discussion around the duration of this arrangement to date and, as we discussed, it was not our intention to renegotiate your current contract to vary down to 1 day. I can see that it has confused the issue for you as it does somewhat contradict the stand down provisions. Therefore we believe it would be best to discontinue that arrangement. I note that you are happy to discontinue the arrangement and wait out the stand down.”

[27] Ms Irvine ceased working one day per week consistent with the communication from Perspective set out in paragraph 21 above.

[28] On 22 June 2020 Ms Irvine made the application to the FWC.

[29] Ms Irvine submits that her “agreeing to no longer do one day a week was because it was in contradiction to stand down provisions … not because [she] no longer wanted to work”. 18

[30] Ms Irvine further submits that “if the stand down had been handled correctly [she] should have been given the option to agree or decline [Perspective’s] proposed cut in hours with redundancy as per [her] contract as a last resort if [she] chose not to accept their offer”. 19

Legal framework

[31] Part 3-5 of the FW Act contains sections of the FW Act that concern stand down of employees. Section 524 of the FW Act provides that an employer may stand down an employee or employees for a period of time in certain circumstances and that the employer is not required to make payments for that period of time.

524 Employer may stand down employees in certain circumstances

(1) An employer may, under this subsection, stand down an employee during a period in which the employee cannot usefully be employed because of one of the following circumstances:

(a) industrial action (other than industrial action organised or engaged in by the employer);

(b) a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown;

(2) However, an employer may not stand down an employee under subsection (1) during a period in which the employee cannot usefully be employed because of a circumstance referred to in that subsection if:

(a) an enterprise agreement, or a contract of employment, applies to the employer and the employee; and

(b) the agreement or contract provides for the employer to stand down the employee during that period if the employee cannot usefully be employed during that period because of that circumstance.

Note 1: If an employer may not stand down an employee under subsection (1), the employer may be able to stand down the employee in accordance with the enterprise agreement or the contract of employment.

Note 2: An enterprise agreement or a contract of employment may also include terms that impose additional requirements that an employer must meet before standing down an employee (for example requirements relating to consultation or notice).

(3) If an employer stands down an employee during a period under subsection (1), the employer is not required to make payments to the employee for that period.

[32] Section 526 of the FW Act provides that the FWC may deal with a dispute about the operation of Part 3-5.

526 FWC may deal with a dispute about the operation of this part

(1) The FWC may deal with a dispute about the operation of this Part.

(2) The FWC may deal with the dispute by arbitration.

Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(3) The FWC may deal with the dispute only on application by any of the following:

(a) an employee who has been, or is going to be, stood down under subsection 524(1) (or purportedly under subsection 524(1));

(b) an employee in relation to whom the following requirements are satisfied:

(i) the employee has made a request to take leave to avoid being stood down under subsection 524(1) (or purportedly under subsection 524(1));

(ii) the employee's employer has authorised the leave;

(c) an employee organisation that is entitled to represent the industrial interests of an employee referred to in paragraph (a) or (b);

(d) an inspector.

(4) In dealing with the dispute, the FWC must take into account fairness between the parties concerned.

[33] The FWC’s power to deal with a dispute concerning the stand down of employees is clear from section 526 and section 595 of the FW Act.

595 FWC’s power to deal with disputes

(1) The FWC may deal with a dispute only if the FWC is expressly authorised to do so under or in accordance with another provision of this Act.

(2) The FWC may deal with a dispute (other than by arbitration) as it considers appropriate, including in the following ways:

(a) by mediation or conciliation;

(b) by making a recommendation or expressing an opinion.

(3) The FWC may deal with a dispute by arbitration (including by making any orders it considers appropriate) only if the FWC is expressly authorised to do so under or in accordance with another provision of this Act.

Example: Parties may consent to the FWC arbitrating a bargaining dispute (see subsection 240(4)).

(4) In dealing with a dispute, the FWC may exercise any powers it has under this Subdivision.

Example: The FWC could direct a person to attend a conference under section 592.

(5) To avoid doubt, the FWC must not exercise the power referred to in subsection (3) in relation to a matter before the FWC except as authorised by this section.

[34] Case law provides guidance on dealing with a dispute under this part of the FW Act.

[35] In SSX Services Pty Ltd v The Australian Workers’ Union²⁰ (SSX Decision) it was held that it was important to characterise the dispute. The Full Bench said:

“[17] We have set out the relevant legislative provisions above because of their importance to considering the grounds of appeal. Importantly, the right to stand down employees under s.524 arises from the effect of the section itself. The right is not dependent on approval of the Commission. However, to the extent that a dispute arises in relation to the exercise of that right, the Commission is empowered by s.526 to deal with that dispute by arbitration. The Commission is required to take into account fairness between the parties concerned and thereby incorporate an overall discretionary factor into the task of determining a dispute over whether the right to stand down is correctly invoked in the circumstances. The parties are bound by s.527 to comply with an order of the Commission dealing with a dispute. These provisions make it important to correctly identify the subject matter of a dispute the subject of arbitration for the purposes of any such order.

[18] The characterisation of disputes arises in various contexts under the Act, most particularly in relation to disputes arising from the application of awards and agreements. It is necessary to have regard to the nature of a dispute alleged in an originating application and the factual circumstances as they evolve for the purposes of conciliation and arbitration of the dispute. A Full Bench of the Commission’s predecessor expressed the importance of characterising a dispute in this way, albeit in a different statutory context, namely the resolution of disputes arising under certified agreements made under the Workplace Relations Act 1996 (Cth):

“[45] A dispute referred to the Commission must be properly characterised before powers conferred by a dispute settlement provision in a certified agreement are exercised. This is necessary in order to determine whether the dispute is ‘over the application of the agreement’ within the meaning of s.170LW of the WR Act.

…

[47] In characterising the nature of the dispute in this matter the Commission is not confined to the dispute notification document. The entire factual background is relevant, including matters such as the submissions advanced. In this context we note that in TWU v Mayne Nickless Ltd the Full Court of the Federal Court held that in determining whether an application calls on the Commission to exercise judicial, as opposed to arbitral, power ‘a court should review the entire factual background to properly characterise the claim and the power sought should be invoked.””

(references omitted)

[36] In Construction, Forestry, Maritime, Mining and Energy Union v DP World Melbourne Ltd (DP World Melbourne Ltd Decision) Deputy President Colman said that the exercise of the right to stand down must be volitional (on the part of the employer). He said:

“[37] Section 524 commences by stating that an employer may, ‘under this section’, stand down an employee during a period in which the employee cannot usefully be employed because of one of the three circumstances that are then identified. The significance of an employer standing down an employee is that the employer is not required to make payments to the employee for the period of the stand down (s 524(3)). The section confers a right on an employer not to pay employees in particular circumstances. In my view, the exercise of the right must be volitional. I find it difficult to see how an employer could be said to have stood down an employee under s 524 if it did not exercise its right under that section.”

[37] Deputy president Colman dismissed the application made in this circumstance for want of jurisdiction.

[38] In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & Anor v FMP Group (Australia) Pty Ltd²¹ (FMP Decision) it was held that there needs to be a temporal connection, as well as a causal connection, between one of the circumstances arising (that is: industrial action; a breakdown of machinery or equipment; a stoppage of work) and the standing down of an employee because the employee cannot usefully be employed. In that decision, Deputy President Gostencnik said:

“[31] Section 524(1) is intended to relieve an employer of the obligation to pay wages to employees who cannot be usefully employed in certain limited circumstances. The consequences of a stand down can be severe for an employee as the employee may be deprived of wages for a lengthy period. Whether a particular employee can be usefully employed is a question of fact to be determined having regard to the circumstances that face the employer. The circumstances and their effect on the capacity of an employer to usefully employ a particular employee cannot be known in advance of the circumstance arising, although educated guesses may be made. Section 524(1) is unlikely to have been intended to operate so as to deprive an employee of wages and to relieve an employer of the obligation to pay wages before one of the circumstances in s.524(1)(a)-(c) has arisen. Indeed the structure and language of s.524(1) shows that there needs to be a temporal connection between one of the circumstances arising and the standing down of an employee because the employee cannot usefully be employed. The words “because of” in s.524(1) are used to indicate a causal link between the occurrence of a circumstance and the absence of useful employment. In that sense, the alleged absence of useful employment for the Relevant Employees cannot be said to have been caused by industrial action, as no industrial action had taken place at the time the Relevant Employees were stood down.

[32] It follows, in my view, that in order for an employer to validly exercise its right under s.524(1)(a), the employee who is to be the subject of a stand down must, at the time of being stood down, be engaging in the industrial action/have previously engaged in industrial action which causes the unavailability of useful employment, or have his or her capacity to be usefully employed affected by the industrial action of others that is happening or has happen. It cannot be said that the Relevant Employees could not usefully be employed during a period unless that period is affected by actual industrial action taken by then. Consequently, in my view, the Employer did not have a proper basis to stand down the Relevant Employees under s.524(1)(a). Given that finding, it is unnecessary for me to consider whether the Relevant Employees could usefully be employed in the event that the industrial action eventuated.”

[39] The Full Bench in Bristow Helicopters Australia Pty Ltd v Australian Federation of Air Pilots²² (Bristow Helicopters Decision) quotes this decision with approval.

[40] In Mr Ryan La Plume v Thomas Foods International Pty Limited T/A Thomas Foods International 23 (Thomas Foods Decision) Deputy President Anderson described what constitutes a “stoppage of work”:

“[49] For the aforementioned reasons, what constitutes a “stoppage of work” in section 524 should not be so broadly construed as to include a mere downturn in business activity 8 nor be so narrowly applied as to require the entire cessation of business activity. The statutory phrase is a stoppage of work, not a stoppage of the business. For there to be a stoppage of work some defined business activity with respect to which work is performed needs to cease9, but not the cessation of business activity entirely. Whilst in certain circumstances both may apply (for example, the fire at Thomas Foods Murray Bridge in January 2018 resulting mass stand downs and redeployments10) a business might still be operating notwithstanding an external event causing distinct areas of work to be sufficiently impaired so as to warrant stand downs.”

[41] The Bristow Helicopters Decision addressed the remedy in determining a dispute under s.596. It determined that the order sought was beyond the power of the FWC to grant. The Full Bench said:

“[55] We note the following extract from paragraph [567] of the decision in Hatchett v Bowater Tutt Industries Pty Ltd (hereafter “Hatchett”):

“A claim for payment of wages, or for wrongful dismissal, or for breach of an award in whatever form the claim of legal right may have been cast is beyond the jurisdiction of the Commission. This is clearly established by a series of decisions of the High Court …”

[56] Further, in R v Gough; Ex parte Key Meats Pty Ltd (hereafter “Gough”), Gibbs CJ stated:

“However, the Commission had no jurisdiction to determine the legal rights of the employees who had been stood down or to enforce the rights given by the award.”

[57] We are of the view that the circumstances in Gough are not dissimilar from those in the present case. Namely, there has been “an attempt to secure payment by the prosecutor to the employees who had been stood down.” As the dispute involves a claim for payment of wages as outlined in Hatchett and revolves around the legal rights of the affected parties as referred to in Gough, we are of the view that making an Order in such circumstances is beyond the jurisdiction of this Commission. As such, Order 2 made by the Commissioner pursuant to the section 526 application is beyond the jurisdiction vested in the Commission.””

(references omitted)

[42] This decision was quoted with approval in the DP World Melbourne Ltd decision. Deputy President Colman said:

“[48] In Bristow Helicopters Australia Pty Ltd v AFAP, a Full Bench of the Commission overturned a decision that had determined that an employer had contravened s 524. Pursuant to the decision, orders had been issued requiring the employer to treat the stand downs as null and void and to pay the affected employees their wages for the relevant period. The Full Bench held that these orders were beyond power, and referred to the decision of Gibbs CJ in R v Gough; Ex parte Key Meats Pty Ltd, where his Honour affirmed that the Commissions predecessor had no jurisdiction to determine the legal rights of employees who had been stood down, or to enforce their award rights. The Full Bench upheld a different order made by the Commissioner, which had required that the employer withdraw the stand downs and, prospectively, allow employees to return to work. This order was permissible, as it created new rights and obligations and involved the exercise of arbitral power. In my view, Bristow Helicopters usefully illustrates the proper limits of the Commission’s power under s.526.”

Jurisdiction

[43] It is always necessary for the FWC to satisfy itself that it has the jurisdiction to deal with a matter before it. In the DP World Melbourne Ltd Decision Deputy President Colman found that Part 3-5 of the FW Act had no operation because the employer did not purport to stand down employees under s.524. This is not such a case. Although Perspective now concedes that it had no basis to stand down Ms Irvine pursuant to s.524 of the Act, at the time it said that it did. 24 Section 526 of the FW Act provides that the FWC may deal with a dispute about the operation of Part 3-5 of the Act and may do so by arbitration. I am satisfied that I have the jurisdiction to deal with this dispute.

Characterisation of the dispute

[44] Guided by the SSX Decision I consider that it is important to characterise the dispute. The dispute between Ms Irvine and Perspective arises in the context of the COVID-19 period which has given rise to serious and regrettable disruption and disadvantage for employers and employees alike.

[45] Ms Irvine complains about being stood down in circumstances where there has been a downturn of work, not a stoppage or work. She further complains about the “incorrect and uninformed way of engaging me in hours outside of my contract”. Ms Irvine considers that her purported reduction in hours was unfair. She says “Instead of the whole company fairly carrying the load for the duration of the downturn, only some employees like myself carried the majority of that load by losing the majority or all of our hours”. 25

[46] Perspective concedes that it did not stand down Ms Irvine consistent with s.524 of the Act but rather contends that Ms Irvine agreed to reduce her hours.

Consideration

[47] Perspective purported to stand down Ms Irvine from late March or early April 2020. Oral and written communication in evidence makes this clear. I agree with both Ms Irvine and Perspective that Ms Irvine was not stood down in compliance with s.524 of the Act.

[48] One or more of the specific circumstances under which an employer may stand down an employee (that is, industrial action; a breakdown of machinery or equipment; a stoppage of work) and the standing down of an employee because the employee cannot usefully be employed because of one of these reasons, are simply not present in this case. The temporal and causal connection set out in the FMP Decision is not apparent here.

[49] Perspective should not have stood down Ms Irvine purportedly because of a stoppage of work. Guided by the Thomas Foods Decision I do not consider that there was a stoppage of work.

[50] I accept that there was a downturn in work that significantly affected Perspective’s profitable work. Ms Irvine was employed to promote Perspective in the market and the market for the work promoted by Ms Irvine’s activity on the website, on social media and on events had turned down in the face of COVID-19. However, the work has not stopped. The business is still providing services, albeit services that do not earn as much margin as the services that have been most affected by COVID-19.

[51] Had Perspective been able to access JobKeeper they would have been able to give Ms Irvine a JobKeeper enabling stand down direction, but they were not. I accept that this was a confusing and troubling time for Perspective but this does not change the fact that a stand down pursuant to s.524 of the FW Act was not available to Perspective.

[52] Ms Irvine was offered work for one day per week and reluctantly accepted this after a delay occasioned by her investigation of her entitlement to JobSeeker. I accept that this occurred with good intent by Perspective to support Ms Irvine in securing a more favourable income outcome than that which Perspective could provide. But this does not change the circumstance that during this period Ms Irvine believed that Perspective had stood her down. This is because Perspective had represented this as their action to Ms Irvine. She had been informed on multiple occasions that she was stood down due to a stoppage of work. I consider that she did not agree to reduce her hours to one day per week but rather accepted the offer of one day’s work per week under the impression that she was stood down. Perspective made it clear in the all staff email of 9 June 2020 set out in paragraph 23 above that “there are currently no plans for the termination of any staff, nor for the renegotiation of existing contracts to lesser hours or conditions.”

[53] That Perspective now accept that they could not avail themselves of the provisions of s.524 of the Act does not change the situation that faced Ms Irvine.

[54] I agree with Ms Irvine that she should have been given the option to agree or decline Perspective’s proposed cut in hours with redundancy as a last resort if she chose not to accept their offer. 26

Remedy

[55] Ms Irvine set out the remedy she seeks in her application as follows:

1. I want it clarified that the stand down is legitimate, and be given the right documentation with terms and conditions and options to sight in regards to the stand down

2. I want the stand down to be undone if it has not correctly been used.

3.If applicable I want to be paid for the time stood down if there was a misuse of ‘stand down due to a stoppage of work’.

4. If the stand down has been used inappropriately, and they feel there is no work for me to do and/or they decide the business needs to save money by not paying wages in this time, then if appropriate I would like to be offered redundancy as per my contract, which would remunerate me 7 weeks redundancy 3 weeks notice period, all accrued leave, plus the weeks owed from stand down if applicable.

[56] Ms Irvine calculated the amounts she seeks, including $10,325 in lost pay and $862.40 in accrued annual leave.

[57] I consider that I do not have the power to determine what Ms Irvine should have been paid pursuant to her employment contract, or any industrial instrument that might cover her, during the period of purported stand down. I note that neither Ms Irvine nor Perspective made submissions in regard to any award or enterprise agreement coverage.

[58] It would be an exercise of judicial power which, guided by the Bristow Helicopters Decision, I consider that I am unable to exercise. To pursue her entitlements Ms Irvine would need to make application to a court of competent jurisdiction.

[59] Alternatively, and consistent with efforts undertaken during conciliation, I urge Ms Irvine and Perspective to confer with a view to reaching agreement on a remedy.

[60] I have found that Ms Irvine was not stood down in accordance with s.524 of the FW Act. Accordingly, the stand down should cease and she should be permitted to return to work for her usual hours of the day, and days of the week, from the first working day following the date of this decision. I so order.