Stand Down, JobKeeper and Workplace Relations – Where to From Here?

As the delay to “back-to-normal” lengthens, Prime Minister Scott Morrison announced on 21 July 2020 that JobKeeper would be extended until March 2021. On 23 July 2020 the Treasurer, Josh Frydenberg noted that “through no fault of their own, as a result of the pandemic around 709,000 jobs were lost across the country in the June quarter”1 and that “960,000 businesses and not-for-profits and more than 3.5 million individuals have been covered by the JobKeeper payment”2.  

COVID-19 has impacted all Australians as they grapple not just with a pandemic, but changes to their careers, work-life balance and expectations of employment.  

So, what does this mean for national workplace relations?  

A new agenda 

Prior to commencing work on Fair Work Legislation 2020-21 the General Editors, Mark Rinaldi, Dr Victoria Lambropoulos, Rohan Millar and Aaron Neal were looking forward to commenting on the expected review of the Fair Work Act 2009. Instead, COVID-19 hit Australian shores and the review of the Act was pushed to later in the year3. In lieu of the slated review, Parliament introduced the Coronavirus Economic Response Package Omnibus (Measures No 2) Act 2020 and Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 to deal with the economic fall out of the pandemic. The new Part 6-4C of the Fair Work Act 2009 provides a “flexible framework for engaging and directing employees to perform a variety of duties, without triggering breaches of industrial instruments and contract law which would otherwise apply”4.  The Fair Work Commission (Commission) likewise quickly responded to the pandemic, amending a host of Modern Awards prior to the introduction of the Omnibus Act. The Commission also published a JobKeeper disputes Bench Book to guide legal professionals and applicants in relation to the operation of the new scheme.  

The goal in 2020 changed from overhaul – to save jobs.  

Stand down 

As the Editors note, “even though the new Part [6-4C] may be seen as an alternative to the stand down framework in Part 3-5 of the FW Act, it is entirely different and departs significantly from the accepted meaning of stand down”5. As Dr Lambropoulos notes in her article6, “the existing stand down framework cannot help employers in the current crisis where their ability to trade is restricted so they can operate, but only minimally. This is why Part 6-4C was needed”. The application of section 524 is generally thought to apply only when an employer’s business operations have completely stopped or shut down – they do not apply merely because there is a deterioration of business conditions7. This puts many employers between a rock and a hard place whilst they deal with restrictions imposed on trade during lockdowns because many businesses have not applied for JobKeeper. Therefore, the stand down provisions in Part 3-5 continue to apply during the pandemic. For further details, see Fair Work Legislation 2020-21.  

JobKeeper 

The new Part 6-4C of the Fair Work Act 2009 (Cth) commenced operation on 9 April 2020 and introduced a swathe of new provisions that affected workplaces across Australia. However, the new part only applies if an employer qualifies for the JobKeeper scheme8. The eligibility requirements are set out in Division 2 of Part 2 of the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020.  

The Scheme provides employers who qualify with the power, independently of Part 3-5 of the Fair Work Act 2009, to give a JobKeeper enabling stand down direction: see section 789GDC. As noted by Neal in his article,  

During the JobKeeper enabling stand down period, the employer must continue to satisfy the wage condition, the minimum payment guarantee and the hourly rate of pay guarantee but is not otherwise required to make payments to the employee in respect of the JobKeeper enabling stand down period (section 789GDC(2)). 

The JobKeeper enabling stand down direction must be reasonable in all the circumstances9.  

But who determines eligibility, and which legal institution has the authority to deal with disputes about the operation of Part 6-4C? 

The Commission may deal with a dispute about the operation of the Scheme (including by arbitration) by virtue of section 789GV. However, it has ruled that it does not have the power to determine eligibility: see for example Feyan v FAL Group Pty Ltd, Edmonds v Starts at 60 Pty Ltd and Hatton v Harbour Guidance Pty Ltd, and the Commission’s Bench Book at page 2610.  

A key consideration in disputes in relation to JobKeeper stand down directions is reasonableness: seesection 789GK and Jones v Live Events Australia Pty Ltd. In this case, the JobKeeper enabling stand down direction was found to be unreasonable by reason of the magnitude of reduction. Therefore, Anderson DP “substituted a different JobKeeper enabling direction” under the express power contained in section 789GV(4)(c)(ii)11.  

Due to the Fair Work Commission advising that it does not have jurisdiction to determine eligibility, it remains to be seen whether an applicant will dispute eligibility for JobKeeper in the Federal Court and what the outcome of, and considerations in, such a dispute would be.  

For detailed examination of the application of Part 6-4C see Fair Work Legislation 2020-21.  

Long-term impact  

2020 is a year without parallel. The threat of catastrophic economic outcomes has seen the legislative measures implemented to withstand the pandemic loosen deeply entrenched industrial protections. As the General Editors note in Fair Work Legislation 2020-21, “access to stand-down provisions, and flexibility in hours, duties and leave arrangements, which would otherwise have been largely out of reach for most employers facing economic hardship, have been made available by legislative amendment as part of the effort to save jobs”12.  

The much-awaited review of the Fair Work Act 2009 will no doubt be shaped by the adaptations we have all had to make during the pandemic, whether that be working from home, changing work dynamics, stand down or the JobKeeper subsidy. We look forward to the findings of the working groups and review of the Fair Work Act 2009

Until then – keep safe.  

Note: For in-depth coverage of the operation of JobKeeper, Part 6-4C and stand down provisions of the Fair Work Act 2009 see Fair Work Legislation 2020-21 and National Workplace Relations subscription service available on Westlaw and Proview.  

  1. The Hon Josh Frydenberg MP and The Hon Mathias Cormann MP, Economic and Fiscal Update (23 July 2020)
  2. Ibid.  
  3. See announcement of the Attorney-General and Minister for Industrial Relations the Hon Christian Porter MP on 3 June 2020 (Last accessed 24 July 2020)
  4. Victoria Lambropoulos, Mark Rinaldi, Rohan Millar and Aaron Neal, “Year in Review 2020-21” in Rinaldi, Lambropoulos, Millar and Neal (eds) Fair Work Legislation 2020-21 (Thomson Reuters, 13th ed, 2020) [1.20].  
  5. Ibid.  
  6. Victoria Lambropoulos, “Stand Down and the taking of Annual Leave under the Fair Work Act 2009 (Cth) before Coronavirus” in Rinaldi, Lambropoulos, Millar and Neal (eds) Fair Work Legislation 2020-21 (Thomson Reuters, 13th ed, 2020) [SD.40].  
  7. Ibid.  
  8. Neal, “JobKeeper and the Fair Work Act 2009 (Cth) – Workplace relations and legislative response to COVID-19” in Rinaldi, Lambropoulos, Millar and Neal (eds) Fair Work Legislation 2020-21 (Thomson Reuters, 13th ed, 2020) [JK.20]. 
  9.  Ibid, [JK.40].  
  10. above n 8, [JK.60]. 
  11. Rinaldi, Lambropoulos, Millar and Neal (eds) Fair Work Legislation 2020-21 (Thomson Reuters, 13th ed, 2020) [FWA.789GV.60].
  12. above n 4.

Rebecca is an admitted lawyer in New South Wales and Legal Editor. She manages a variety of subscription services, including National Workplace Relations and edited Fair Work Legislation 2019 20. Rebecca holds a Bachelor of Arts (English Literature) (Distinction) and Bachelor of Laws from the University of Wollongong. Prior to joining Thomson Reuters, Rebecca was an employed lawyer at John Lloyd & Co Solicitors & Attorneys.

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