DECISION

Fair Work Act 2009
s.526 - Application to deal with a dispute involving stand down

Mr Andrew Lamont
v
Brilliant Lifts Australia Pty Ltd
(C2021/7017)

Application to deal with a dispute involving stand down – s.524(1)(c) – stand down in relation to a stoppage of work – stand down relating to COVID-19 – no stoppage of work – application successful – compensation awarded.

[1] On 19 October 2021, Mr Andrew Lamont (the Applicant) filed an application pursuant to s.526 of the Fair Work Act 2009 (Cth) (the Act), alleging that Brilliant Lifts Australia Pty Ltd (the Respondent) stood the Applicant down in circumstances not permitted by s.524 of the Act (the Application). The Respondent filed a response to the Application on 28 October 2021 (the Employer’s Response).

[2] Directions were issued in this matter programming the filing of submissions and other documents (the Directions).

[3] The Directions were complied with, and the following documents were filed:

(a) On 1 November 2021, the Applicant filed an outline of submissions, and the witness statement of Mr Andrew Lamont dated 1 November 2021 (the Witness Statement of the Applicant);

(b) On 4 November 2021, the Respondent filed an outline of submissions, a witness statement of Mr Norman Gray dated 4 November 2021 (the Witness Statement of Mr Gray), and a witness statement of Mr Hany Gad dated 4 November 2021 (the Witness Statement of Mr Gad).

(c) On 8 November 2021, the Applicant filed further submissions in reply and a further witness statement of Mr Andrew Lamont dated 8 November 2021 (the further Witness Statement of the Applicant).

[4] The matter was heard on 10 November 2021 (the Hearing), with the Applicant being represented by Ms Phillips of Marrickville Legal Centre, and the Respondent by Mr Chi of Fusion Legal. During the course of this Hearing, additional documents were provided by the Respondent, being six emails of various dates, in relation to the sick leave and other correspondence between the Applicant and his colleagues. All witnesses were cross-examined in the Hearing.

[5] At the Hearing I made further directions for the filing of closing submissions. These Directions were complied with, the Applicant submitting final submissions on 11 November 2021, and the Respondent filing their closing submissions on 16 November 2021.

Factual Background of the Application

[6] Since early 2013, the Applicant has been employed by the Respondent as a full-time Technical Sales Consultant. The Respondent’s enterprise is an elevator business based in New South Wales and the Australian Capital Territory, and its primary business is the selling and maintenance of elevators, escalators and travellators for various projects.

[7] The Respondent was in voluntary administration for the period between 5 September 2020 and 14 September 2021.

[8] The Applicant continued to work for the Respondent throughout the second New South Wales COVID 19 lockdown period, being approximately 26 June 2021 to 11 October 2021 (the Lockdown Period). The Applicant worked from home during this period as instructed by his employer. During the period of 19 July 2021 to 2 August 2021 the New South Wales Government prohibited non-essential construction work (the Construction Stoppage), although it is unclear as to whether the Respondent’s enterprise, as it involves the maintenance of lifts and other machinery, would have been captured by this prohibition.

[9] On 16 September 2021, the Respondent sent the Applicant an email and attached letter advising that he was being stood down from his employment (the Stand Down Letter). The email, which was in similar terms to the letter, was as follows:

“Hi Andrew,

We regret to advise that as a result of the current health order by the NSW government, and the fact that our company is in one of the highly impacted industries, your sales role can no longer be usefully employed during this period. Accordingly, the company had no option but to direct you to stand down whilst the Health Order is place pursuant to s524 (1) of FAIR WORK ACT 2009 (cth).

However, we also note that you have accumulated leave entitlements over the years. If you elect to take paid leave for any part of this standdown period, please email us by COB 17 September 2021. otherwise, the company will implement stand down without pay pursuant to s524 (3) of FAIR WORK ACT 2009 (cth) effective from 17 September 2021.

Please refer to attachment letter for more details.”

[10] Also on 16 September 2021, the Applicant responded to the above email as follows:

“The Act states where possible the employer should consider other options, 1 working from home, yes I can continue to do my job working from home as I have been doing.

Under S524, please identify where sales have been stopped due to the stoppage of my work in NSW, please let me know which of your sites are stopped, and explain how this effects a sales role.

I note we have had no discussion with regards to deploying me in other areas of the business where I could work.

S524 also states “Employers generally can’t stand down employees under the Fair Work Act stand down provisions simply because of a deterioration of business conditions or because an employee has coronavirus”

If an employer unlawfully stands down employees without pay, their employees may be able to recover unpaid wages.

S524 states, “an employer should discuss and communicate any decisions they make about implementing a stand down with their employees” I confirm this has not been actioned.

What is the duration of the stand down, noting that NSW government are currently lifting restrictions.

If you can please respond to the above before Close of business tomorrow to allow me to make an informed decision as to my course of action.

[11] On 17 September 2021, the Applicant emailed the Respondent alleging that approximately $3,000 worth of commission was payable to the Applicant on the basis of sales he had achieved. This claim was previously made to the Respondent by emails on 8 April 2021 and 5 July 2021.

[12] On Monday 20 September 2021, the Respondent responded to the Applicant’s 16 September 2021 email. In that response the Respondent maintained it had the right to stand down the Applicant.

[13] On 1 October 2021, the Applicant sent a detailed letter to the Respondent that included, in parts, the following:

“Dear Hany

STAND DOWN OF MY EMPLOYMENT

As you are aware, since 17 September 2021 I have been stood down without pay from my full-time employment as a Technical Sales Consultant with Brilliant Lifts Australia Pty Ltd (Brilliant Lifts). I have been a dedicated and loyal employee of Brilliants Lifts for over 8 years and I am extremely disappointed in how I have recently been treated.

As I set out in my email to Su Jet Lee (cc you) on 16 September 2021, I dispute that the stand down by Brilliant Lifts is lawful on the basis it does not comply with the requirements under section 524 of the Fair Work Act 2009 (Cth) (Act). Brilliant Lifts has no basis to withhold payment of my contractual wage and car allowance and doing so is a breach of my contract.

Stand down requirements

Section 524(1)(c) of the Act provides “An employer may, under this subsection, stand down an employee during a period in which the employee cannot usefully be employed because of … a stoppage of work for any cause for which the employer cannot reasonably be held responsible.”

As set out in the Fair Work Commission case Marson v Coral Princess Cruises (N.Q.) Pty Ltd T/A Coral Expeditions [2020] FWC 2721at [7], there are three criteria for a stand down under section 524(1)(c) of the Act to be lawful:

1. First, the employee must be stood down during a time in which they cannot be usefully employed;

2. Second, there must be a stoppage of work for which the employer cannot be held responsible; and

3. Third, the reason why the employee cannot usefully be employed must be because of the stoppage of work.

An employer is not required to pay wages during a lawful stand down, but is still required to pay for public holidays, annual leave, long service leave and other amounts owing, such as commissions owing and allowances.

Usefully be employed

Whether I can usefully be employed is assessed based on whether Brilliant Lifts can obtain some benefit or value from my work. It is not limited to the work I usually perform and can include other work in the business. The test used by the Commission is not whether it is merely convenient for me to be stood down by Brilliant Lifts.

I can usefully be employed to continue to perform my usual duties finding new work/estimating and tendering new projects remotely from home that is a direct benefit for Brilliant Lifts. This work has not ceased to exist because of COVID-19 or the current Public Health Orders. In fact, my workload has at times during this period been more than usual. I can perform my duties remotely, which is demonstrated by the fact I have been performing these duties remotely for the past 6 months.

Further, in Su Jet Lee’s email datad 20 September 2021 it states “that there are no other vacancies that the company could put you on to. You are neither trained nor skilled for engineering, installation or warehouse works”. This is not accurate. I am trade qualified in mechanical and production engineering and could usefully be employed to do engineering, installation or warehouse works if directed as an alternative to stand down. Despite me notifying Su Jet Lee of this inaccuracy already, I have not been offered engineering or warehousing work.

Stoppage of work

The phrase ‘stoppage of work’ is interpreted by the Commission to mean a cessation of activity within the employer’s business. A mere reduction in available work is not a stoppage of work that permits an employer to stand down employees under section 524(1)(c) of Act.

Brilliant Lifts primary business activity of selling and maintaining elevators, escalators and travelators continues and has not ceased because of the current Public Health Orders in Sydney. The construction industry is still operating and the need for lifts has not ceased and restrictions have been progressively easing.

In the email from Su Jet Lee dated 20 September 2021 states the business “has been significantly reduced if not completely prevented as a result of the covid pandemic”. It is not accurate to say Brilliant Lifts business has been “completed prevented”. The language in the email appears to acknowledge that it has not ceased, by including the words reduced instead. The stay at home orders in Sydney have been in place since July 2021 and, unlike certain retail and hospitality business, the restrictions have not resulted in the business of selling lifts to cease.

I also understand I am the only employee of Brilliant Lifts that has been stood down without pay to nil hours. If that is correct, I have been unfairly targeted by that decision and the fact other employees have not also been stood down weakens Brilliant Lift’s position that there is a stoppage of work.

Where an employer makes an organisational decision that it no longer requires an employee's role to be done by anyone, and there is no cessation of the employer's business activities, that gives rise to a redundancy of the role under section 119 of the Act, not the entitlement to stand down the employee without pay.

No useful work because of stoppage of work

Where there has been a decline in sales, this is due to the fact Brilliant Lifts was in administration for the period 5 September 2020 to 14 September 2021, not the current Public Health Orders. Therefore, the argument that the decline in sales is because of the stoppage is not accurate and does not meet the requirement of section 524(1)(c) of the Act

My position

My position remains that the current stand down of my employment is unlawful. I am writing to you to request my return to work immediately and for Brilliant Lifts to pay me by wages and car allowance from 17 September 2021 that it has unlawfully withheld in breach of the Act. This conduct is having a significant financial impact on me.

In the event this does not happen, I intend to make an application to the Fair Work Commission under section 596 to deal with a stand down dispute. The Commission is required to take into account fairness between the parties concerned.

I believe the Commission will consider the stand down unlawful and unfair, similar to the matter Stelzer v The Trustee for The Ideal Acrylics Unit Trust T/A Ideal Acrylics [2020] FWC 4129 where a decline in available work was found not to be a stoppage and not a lawful stand down.”

…

(original emphasis)

[14] On 8 October 2021, the Respondent responded to the above correspondence as follows:

“Dear Andrew,

We write to advise that the Company does not agree with the comments raised as per your email dated 1 October 2021.

The Company affirms its position to stand down and does not agree that its decision was improper or unreasonable and repeats its basis for the decision as per previous correspondences to you dated 16 September 2021 and 20 September 2021 respectively.

Accordingly, the Company does not accept your claim that you were made redundant and the Company will revoke the stand down once the lockdown is lifted subject to vaccination requirement under the NSW Health Order (if applicable). Your line manager will then discuss the sale plan and target when such time arise.”

[15] On 10 October 2021, the Applicant wrote to the Respondent as follows:

“I confirm receipt of your email.

I disagree with the position taken by the Company regarding my stand down to date and reserve my rights.

I note that the Public Health (COVID-19 General) Order 2021 applies from Monday, 11 October 2021 lifts the lockdown in Sydney and eases restrictions. From Monday, the COVID-19 restriction reasons the Company relied on to stand down my employment no longer apply. Can you confirm that my stand down will end on Monday as the requirements in your email below the Company will revoke the stand down once the lockdown is lifted subject to vaccination requirement under the NSW Health Order (if applicable)” have been satisfied as the lockdown is being lifted and I have been fully vaccinated since 1 September 2021.

Please confirm as soon as possible.”

[16] Notwithstanding the contents of its email of 8 October 2021, and the lifting of the Lockdown Period, the Respondent continued to stand down the Applicant. On 14 October 2021 the Respondent advised the Applicant that it “…intends to revoke the stand down as the state is moving out of the lockdown as stated in” the email of 8 October 2021, and “…the company has been working on a return-to-work program” for the Applicant.

[17] On 19 October 2021, the Applicant filed the Application that is the subject of these proceedings.

[18] On 27 October 2021, the Respondent wrote to the Applicant as follows:

“Matter number: C2021/7017

We are committed to engaging Andrew back into the workplace and look to provide him with a start back to work. We see this as a positive process as the NSW economy starts recovering from the recent lockdowns and Brilliant Lifts re-establishes it market position.

Initially, Andrew will be reinstated as a Sales Consultant for 19 ours of the week from 1^st November 2021. These reduced hours are anticipated as customer visits will not be achievable since clients are also re-establishing themselves from lockdown conditions. During his out of work hours, an out of office message should be put on his email and telephone.

Andrew will be reinstated to full-time work as soon as he reaches the sales target noted below but no later than 1^st December 2021.

His work location will be our Mascot offices, hours of business are Mon-Fri are 9:00 – 17:00. Andrew will not be required to attend office in accordance to the NSW health order. However, he is expected to attend client site and conferences as part of his duties.

Andrew will report directly to me and I will work closely with him to achieve his sales targets.

We enclose a review template that will be used to assist Andrew in achieving the targets. A copy of this draft review has previously sent to Andrew for discussion of his duties.

In summary:

1) Sales target:

a) Quarterly – 6 lifts at $700k,

b) Annually – 24 Lifts at $2.8m,

c) Sales margin – at 9%

2) Customer visits: no less than six per week and maintain work diary to be viewed and assessed by me.

As there is no written record of bonus scheme, we will review Andrew’s performance and offer a baseline commission per unit rate of pay with additional criteria to encourage sales in line with Brilliant Lift priorities.

We look forward to welcoming Andrew back to work and grow with the Company.”

[19] The Applicant remains stood down without pay, although for at least the period of 29 October 2021 to 5 November 2021, the Applicant was on sick leave.

Relevant Legislation

“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;

(c) a stoppage of work for any cause for which the employer cannot reasonably be held responsible.

(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.”

“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.”

The Applicant’s submissions

[20] The Applicant’s submissions addressed the criteria laid out in s.524 of the Act, being:

(a) that the employee can only be stood down at a time in which they cannot be usefully employed;

(b) that there must be a stoppage of work for which the employer cannot be reasonably held responsible for, and

(c) that the reason why the employee cannot usefully be employed must be because of the stoppage of work.

[21] The Applicant’s submissions also addressed the issue of fairness and the ability to partially stand down.

(a) Whether the Applicant can be usefully employed

[22] The Applicant submitted that an assessment of an employee’s ability to be usefully employed must consider whether there is useful work for the employee to perform, and also consider generally notions of fairness and good faith.

[23] The Applicant submitted that he could have performed work in various ways for the Respondent. His role as a Technical Sales Consultant could have been performed from his place of residence, as it had been for the period prior to the stand down. The Applicant’s primary responsibilities included creating tenders for projects, making telephone calls, and obtaining lift unit sales for the Respondent. The Applicant had been undertaking this work during the Lockdown Period, and the Applicant submits that this work, in obtaining sales for the Respondent, did not cease to exist. The Applicant filed examples of emails that continued to be addressed to him during the stand down period, being notifications of business calls or invitations to tender during the period 13 October 2021 to 29 October 2021. 1 On the evidence of Mr Gray, the Applicant had in fact received approximately 172 business related emails during the stand down period, approximately 120 of which being from tendering platforms, and a small number of direct requests from prospective customers.2

[24] The Applicant additionally submitted that he is qualified and trained to undertake alternative roles within the Respondent’s enterprise.

[25] In response to the Respondent’s allegations made in correspondence during mid-October that the Applicant’s role could not feasibly be worked remotely as site visits were required as part of his sales responsibilities, the Applicant disputed working from the office as an operational requirement, noting the Lockdown Period where the Applicant was able to work almost entirely from home, and further noted that even when the Applicant was working in the office, approximately ninety percent of his time was spent in the office, and not on site.

[26] The Applicant further submitted that he was the only employee who was stood down at the times he was stood down, and in the context of there being at least one other employee who had sales responsibilities, the Respondent was not acting in good faith or fairness.

(b) The stoppage of work

[27] The Applicant submitted that the ordinary meaning of the term “stoppage of work” is that there is a cessation of activity within the employer’s business. The Applicant acknowledged that a business’ activity need not be entirely ceased, but that a mere reduction in available work cannot constitute a stoppage of work.

[28] The Respondent’s enterprise involved various services, and the Applicant’s submission was that the Respondent’s primary business activity was the operation of a full-service lift business. The Applicant was the principal sales employee, who could continue to work unaffected by the Lockdown Period Health Orders, for the following reasons:

(a) The Respondent’s primary business activity did not cease during the stand down period, and the Applicant’s role in sales continued to be undertaken,

(b) The public health orders that were in place during the Lockdown Period and stand down period did not require the Respondent’s operations to cease.

(c) The Lockdown Period in Sydney ended on 11 October 2021, and rendered the Applicant capable of attending the office and also attending client sites. The stand down period did not end when the lockdown ended on 11 October.

[29] The Applicant submitted that, if reduced sales were relied upon by the Respondent as a stoppage of work, the voluntary administration for a 12 month period had a material impact on sales, and that was a matter for which the Respondent could be reasonably held responsible.

[30] The Applicant submitted that a drop in revenue, whether this did or did not occur, is not an event that can constituted a stoppage of work.

(c) Whether the reason why the employee cannot be employed is because the stoppage of work

[31] The Applicant’s submission was that, if the employee cannot be reasonably be employed, the reason for this was the Respondent’s desire to reduce labour costs by not paying the Applicant’s wages whilst sales are reduced. This was submitted as not being because of one of the following circumstances found in s.524(1)(a)-(c) of the Act.

(d) Fairness between the parties

[32] The Applicant referred to the case of SSX Services Pty Limited v The Australian Workers’ Union, 3 in a submission that the Commission is required to take into account fairness between the parties, and that this gives rise to an overall discretionary factor in determining whether the right to stand down is correctly invoked.

[33] The Applicant submitted that the stand down of the Applicant, to the exclusion of all other employees, was unfair and the singling out of the Applicant should be taken into account for the purposes of s.524(4).

[34] In relation to the partial stand down, the Applicant submitted that it was an unfair condition of his reinstatement that various sales targets were to be met. The Applicant referred to the difficulty in achieving consistent sales as tender processes vary, as well as the prospective difficulty in reaching quarterly sales targets on a part-time basis, within a month.

(e) Partial stand down

[35] The Applicant submitted in reply to the Respondent’s written materials that the partial stand down proffered by the Respondent is inconsistent with the Act, as it is a scenario not contemplated in s.524(1)(c).

The Respondent’s submissions

[36] The Respondent primarily submitted that the Respondent validly stood down the Applicant on the basis of a genuine stoppage in work, and that stoppage was the New South Wales Government’s public health orders.

[37] The Respondent submitted that there was little work to be performed at the time of the stand down, and that the income coming in would not have been sufficient to cover the wages of the Applicant. The Respondent disputed that the reason for the Applicant’s stand down was a matter for convenience.

[38] The Respondent submitted that there has been no targeting of the Applicant and that the only other sales employee was a more senior staff member being Mr Gray, and as such the Applicant was the only employee in his category.

[39] The Respondent’s submitted, in relation to the character of the stoppage of work, that:

(a) the Construction Stoppage paused all of the Respondent’s jobs;

(b) there was a complete halt to sales activities due to “short (sic) of tender opportunities and inability for site inspections,”

(c) creditors stopped paying their invoices on time.

Consideration

[40] In determination of the Application, I am required to consider the criteria set out in s.524(1)(c) of the Act, as relevantly distilled in The Peninsula School v Independent Education Union of Australia, 4 (Peninsula) as being:

1. Whether the employee can be usefully employed during the period of stand down; and

2. Whether the reason for the employee not being usefully employed is because of one of the circumstances contained within s.524(1) (a), (b), or (c).

[41] Where the reason for the employee not being usefully employed is contained within s.524(1)(c), the additional two elements must be satisfied:

3. There must have been a stoppage of work; and

4. The employer cannot reasonably be held responsible for the stoppage. 5

[42] Should I find that the Applicant may have been usefully employed during the period of stand down, it will be unnecessary to consider 2 – 4 above. 6

Whether the Applicant may be usefully employed

[43] The phraseology usefully employed has been the subject of some consideration by the Commission. In Peninsula, the Full Bench referred to the Explanatory Memorandum of the Fair Work Bill 2008 (Cth), which stated that:

“An employer can only stand down an employee if they cannot be usefully employed. If the employer is able to obtain some benefit or value for the work that could be performed by an employee then the employer would not be able to stand down an employee.”

[44] This assessment of benefit is tempered by the earlier limitation set by the Commonwealth Industrial Court, being that the work must have a net benefit, overall, to the employer’s business “by reason of the performance of the particular work done.” 7

[45] In consideration of the economic consequences on the employer, the net benefit of the Applicant’s work must be considered, but it does not follow that an employer can, at their own financial convenience, elect to stand down an employee. In the matter of Townsend v General Motors-Holden’s Ltd, 8 (Townsend) Morling J held:

“An employee may be able to be usefully employed although, as a matter of convenience [the employer] would prefer him not to work.” 9

[46] The Respondent’s primary position in relation to whether the Applicant may be usefully employed is that there was a reduction in sales for the period immediately prior to the Applicant’s stand down, and therefore there was a reduced capacity for the Applicant to undertake useful work. The Respondent makes this claim on the basis that:

(a) the Respondent experienced a complete halt of sales activities; 10

(b) meetings with potential clients were not possible; 11

(c) the Construction Stoppage period impacted the ability for the Respondent to carry out any work; 12

(d) clients were not paying invoices on time. 13

(a) A complete halt of sales activities

[47] The Respondent has submitted that the sales activities of the Respondent had completely halted, however, the accrual of a sale is not directly reflective of the Respondent’s capacity to provide work for the Applicant. The Applicant submitted a list of active tenders as at early October, 14 which indicated that there were 33 tenders available for submission.

[48] Even where the Respondent was experiencing a drop in sales, as evidenced in the Employer’s Response, 15 the Respondent, as candidly admitted by Mr Gray in cross examination, would still require sales staff to prepare tenders and undertake sales duties as it is an important part of the business.16 If the Respondent was not actively tendering and providing estimates to customers, this would have a negative impact on sales,17 and to stop tendering and putting in estimates would be like “closing the front door of a shop.”18

[49] In support of the position that there was a reduction in sales, the Respondent referred to data filed by the Applicant as an annexure to his witness statement which indicated that there were minimal sales achieved in the latter half of 2021. 19 The Respondent also compared the value of their sales between April 2021 and June 2021 ($360,000) and June 2021 – October 2021 ($0).

[50] Whilst I consider that the Respondent appears to have had some reduction in sales made, the ordinary timeframe between the tender submission and the sale made is twelve to eighteen months, 20 so it cannot be said that the volume of work the Applicant was doing was directly reflected in the contemporaneous sales outcomes of the Respondent.

[51] The Respondent has claimed, in the correspondence to the Applicant throughout October 2021, and in submissions, that the Applicant could not be usefully employed due to the financial strain placed on the Respondent due to the COVID-19 pandemic, and in particular, the Lockdown Period. 21 The Respondent further submitted that the “stark reality was that there was very little work to be performed at the time and it would have actually cost BLA more money if it had not stood down Mr Lamont because the income coming in would not have been able to cover wages owing by BLA (ie. operating at a loss).”22 Evidence of the Respondent’s financial position is contained within the witness statement of Mr Gad, and it is evident that the Respondent has, for nine out of the prior ten years, operated at a loss.23 It is candidly put by Mr Gad that “there is no doubt that [the company] was in a fragile financial position which I have managed very carefully.24

[52] The evidence of Mr Gad in cross examination was clear that the reason for the Applicant’s stand down was the convenience of the Respondent, as they wouldn’t have to pay the Applicant when there were quiet periods of business, 25 and that the Respondent wanted to cut down costs.”26 It was further elucidated that the Respondent was aware that the Applicant may have had available to him the COVID-19 disaster payment.27

[53] It was abundantly clear on the evidence before the Commission that there had not been a complete halt in sales activities of the Respondent. The Respondent simply chose to stand the Applicant down to avoid having to pay his salary.

(b) The inability to meet with clients on site

[54] The Applicant submitted that he had been working from his place of residence from approximately January 2021, 28 at the direction of his employer, and that ninety percent of his employment is regularly undertaken at the office, with ten percent undertaken on various sites.29 Whilst I accept the evidence of Mr Gray in relation to the importance of face-to-face meetings, that “people don’t buy from companies, they buy from individuals,” I note that the capacity for virtual meetings was apparent particularly in the context of post-Lockdown Period interactions. Even if there was some reduction in sales success from working remotely, this would only have had some impact on the quality of approximately ten percent of the volume of work undertaken by the Applicant, and only in the period from the stand down commencement until 11 October 2021.

[55] I accept the Applicant’s submission that the work which was undertaken from home continued to exist, and that during the period the Applicant was stood down, this work was allocated to Mr Gray. 30 I do not accept that the inability to meet clients on site, which nonetheless ceased on 11 October 2021, resulted in the Applicant not being able to be usefully employed.

(c) The Construction Stoppage period impacting the carrying out of work

[56] The Construction Stoppage period was submitted as a reason for the Applicant being unable to undertake useful work, however whilst the Applicant’s role in sales may have been impacted by the considerations of other businesses in their tendering and purchasing trends, the evidence is clear that the Applicant was occupied with sales work during the Lockdown Period.

[57] Even in the event where the Construction Stoppage had impacted the business of the Respondent, the stoppage had concluded over a month prior to the Applicant’s stand down.

(d) Clients not paying their invoices on time

[58] This argument was not significantly pressed during the Hearing of this matter, and given that the Respondent did not provide substantive evidence as to the cashflow of the Respondent, save for creditors reports and other documents relating to the voluntary administration of the company, I do not consider that this matter has any great weight in considering whether the Applicant could undertake useful work for the Respondent.

[59] In the event where the Respondent could have provided evidence outlining a difficulty in cashflow arising from clients not paying their invoices, the Applicant would have likely still been able to engage in useful sales work given the lack of causation between a poor cashflow and the Applicant’s work in sales.

Conclusion on whether the Applicant may have been usefully employed

[60] As is clear from Peninsula, a stand down will not be authorised if the employee can demonstrate that they can or could have been usefully employed over the stand down period. 31

[61] I consider that the Applicant’s work had and continues to have benefit and value to the Respondent, particularly given that he had the capacity to continue remote work in the stand down period prior to 11 October 2021, and work both remotely and in person now. The Applicant has further demonstrated that he has a volume of work available to undertake, and in particular the task of pursuing further sales as apparent from the evidence in relation to the current tenders and other communication the Applicant has had immediately prior to, and during the stand down period.

Whether there was a valid stoppage of work

[62] As I have found that the Applicant can be usefully employed, it is unnecessary to determine whether there was a valid stoppage of work. Should I be incorrect in this finding, I further consider that the Respondent’s submission that there was a valid stoppage of work is unsustainable for the following reasons.

[63] Whilst the Respondent asserted that there were difficulties with making sales during the Lockdown Period, the evidence of Mr Gray was that there was in fact a spike in tenders in May to June, 32 and that the majority of tenders came from industry platforms which could be accessed during the Lockdown Period. Further, the documentary evidence demonstrates that over the period of January 2021 to September 2021, the average number of tenders was consistent with the amount of tenders received in the period 1 September 2021 to 17 September 2021, which was directly before the Applicant’s stand down.33

[64] Even where the Lockdown Period may have caused some disruption and/or a reduction in sales for the construction industry, there is no evidence to suggest that any alleged disruption persisted beyond the conclusion of the Lockdown Period, and in fact, it appears that business was picking up again. 34

[65] The Respondent further alleges the impact of the Construction Stoppage on the business’ activity, however the evidence of Mr Gad indicates that construction work continued to be undertaken by the Respondent, and was required to continue to meet completion dates. 35

[66] In the course of the Hearing, Mr Gray gave evidence that one of the reasons for not making more sales was as a result of the Respondent’s voluntary administration. 36 Insofar as there may have been some reduction in activity of the Respondent, I consider that the voluntary administration of the Respondent, being a matter within the Respondent’s control, contributed to this reduction, and such reduction in sales cannot be squarely placed on the impact of the Lockdown Period on the Respondent.

[67] I consider that, although there may have been a decline in new sales during the period immediately prior to the Applicant’s stand down, that this does not constitute a valid stoppage of work for the purposes of s.524 of the Act.

Was the reason for the lack of useful employment because of the stoppage of work

[68] As I have found that the Applicant could have been usefully employed, and that the stoppage of work alleged by the Respondent is not valid for the purposes of s.524 of the Act, it is unnecessary to consider this proposition.

Partial stand down – validity

[69] Even if my above conclusions are incorrect, the return to work program proffered by the Respondent does not constitute a full reinstatement of his duties following the conclusion of the stand down period, and only offers reinstatement the Applicant for 19 of his usual full time working hours.

[70] The stand down provisions of s.524 do not contemplate a partial stand down, and where a stoppage of work can be proven, it does not follow that a partial stand down could have a basis in s.524(1)(c).

Fairness between the parties

[71] Pursuant to s.526(4) of the Act, I am required to consider fairness as between the parties in my determination of this matter. The Applicant’s position is that the Applicant was regarded differently to other employees of the Respondent, and primarily made the following submissions on respect of s.526(4):

(a) The Applicant suffered financial harm from the stand down;

(b) The Respondent did not explore alternative arrangements, including a mutual agreement of reduced hours or alternative work;

(c) The Respondent imposed the whole burden of the reduction in labour on the Applicant;

(d) The Respondent continued to impose the stand down on the Applicant where it was advised that the stand down would conclude with the conclusion of the Lock Down Period.

[72] In response, the Respondent submitted that:

(a) The fact of the Applicant suffering financial harm is unfortunate, but does not render the stand down unfair;

(b) The Respondent was not ‘targeting’ the Applicant in the stand down, and that the only other sales employee in the company, Mr Gray, had additional responsibilities to the Applicant;

(c) On the basis of the evidence of Mr Gray, 37 and Mr Gad,38 all other employees except Mr Gray also had reduced hours, where their working hours were reduced from 40 hours to 19 hours on 1 September 2021 and increased back from 19 hours to 40 hours on 11 October 2021.

[73] Whilst there were other employees on reduced working hours, the Applicant remained the only employee who was stood down entirely. 39 Further, the employees who were on reduced hours had their hours restored on 11 October 2021, at the end of the Lockdown Period.40 The only other sales employee, Mr Gray,41 did not have his hours reduced, nor was he stood down for any period of time.42

[74] The Respondent’s submission that the Applicant was not treated any differently to other employees is at odds with their own evidence that the Applicant was the only employee who was stood down at all, and also the only employee to not be restored to their previous employment arrangements following the conclusion of the Lockdown Period.

[75] I reject the Respondent’s submissions. Taking into account fairness between the parties, I find that all considerations of fairness weigh in favour of the orders sought by the Applicant being made.

Conclusion

[76] I find that the Respondent’s stand down of the Applicant was not in accordance with the provisions of s.524 of the Act. The Application by the Applicant for stand down orders is therefore granted.

Remedy

[77] I now turn to whether a remedy in settlement of the dispute is appropriate. The Commission does not have jurisdiction to determine legal rights, however, the Commission has jurisdiction to consider questions of fairness in the context of making orders or recommendations for the fair and just settlement of this dispute.

[78] It is appropriate to provide a proportionate remedy to resolve this stand down dispute. It is appropriate that the remedy bear some relationship to the component of the income loss incurred by the Applicant which I have found to be not in accordance with the provisions of s.524 of the Act.

[79] There is no specific formula to apply in the circumstances though I adopt the approach below, tested against overall fairness. I particularly note that the Applicant on numerous occasions made his arguments regarding the inapplicability of the stand down provisions of the Act, which I have found to be correct, abundantly clear to the Respondent. In those circumstances, I particularly find that it is fair to make an order compensating the Applicant for lost salary and allowances.

[80] I find it is fair and reasonable for the Applicant to be paid by the Respondent his ordinary salary, and any allowances he would ordinarily have received, in the period 16 September 2021 to 22 November 2021, but for the stand down notified on 16 September 2021, and since extended.

[81] An order giving effect to that remedy will be published with this decision.

DEPUTY PRESIDENT

Appearances:

Ms J Phillips, for the Applicant.
Mr J Chi, for the Respondent.

Hearing details:

2021.
November 10.
Sydney (via videoconference)

Final written submissions:

16 November 2021.

Printed by authority of the Commonwealth Government Printer

<PR735857>

 1   Witness Statement of Applicant, Exhibit AL-1.

 2   Transcript PN 675 – 676.

 3   [2015] FWCFB 3964.

 4   [2021] FWCFB 844.

 5   Peninsula, [32].

 6   Peninsula, [33].

 7   Peninsula, quoting Re Carpenters and Joiners Award (1971) 17 FLR 330, 334.

 8   (1983) 4 IR 358, 367 – 371.

 9   Ibid.

 10   Witness Statement of Mr Gad [47].

 11   Witness Statement of Mr Gad [47].

 12   Witness Statement of Mr Gad [47].

 13   Witness Statement of Mr Gad [47].

 14   The Application, Annexure G.

 15   Employer’s Response, [4].

 16   Transcript PN 609.

 17   Transcript PN 608.

 18   Transcript PN 638.

 19   Witness Statement of Norman Gray, [20].

 20   Transcript PN 671.

 21   Respondent submissions, [3], [20].

 22   Respondent submissions, [20].

 23   Witness Statement of Mr Gad, [16].

 24   Witness Statement of Mr Gad, [47]

 25   Transcript PN 789 – 791.

 26   Witness Statement of Mr Gad, [59], [62].

 27   Transcript PN 853 – 854.

 28   Witness Statement of Applicant [41].

 29   Witness Statement of Applicant [21], Transcript PN 129 – 140.

 30   Applicant Submissions [14].

 31   Peninsula, [33].

 32   Transcript PN 633.

 33   Witness Statement of Applicant, Exhibit AL-1.

 34   Transcript PN 642.

 35   Witness Statement of Mr Gad, [53].

 36   Transcript PN 599, 649, 659.

 37   Witness Statement of Mr Gray, [33].

 38   Witness Statement of Mr Gad, Annexure F.

 39   Witness Statement of Mr Gray, [33].

 40   Above n 31, 32.

 41   Witness Statement of Mr Gad, [52].

 42   Witness Statement of Mr Gad [52] – [60].