JobKeeper Enabling Direction Quashed on Appeal

Members will be aware that changes to the Fair Work Act provided organisations which were receiving JobKeeper subsidies payments to make changes to their employees’ hours of work.

Recently one company’s decision to do so resulted in a claim being made against them in the Fair Work Commission (FWC).

The company issued a “JobKeeper enabling direction” under section 789GDC of the Fair Work Act 2009 to all employees for whom the Company was eligible to receive a JobKeeper subsidy, including full time, part time and long term casual employees. The substance of the Direction was that normal working hours were being reduced to 50 hour per fortnight. 

In the initial decision, the Fair Work Commission determined that the Direction was not unreasonable. 

The Transport Workers Union (TWU) appealed saying that the decision involved a misinterpretation of the act and an error of fact. 

A Full Bench of the FWC quashed the original decision stating that the decision adopted an incorrect approach to the determining the ‘reasonableness’ of the Direction under section 789GK of the Fair Work Act. The FWC found that the decision failed to properly take into account the relevant circumstances of employees.

The decision set out issues that should be considered when changing employee hours under the new JobKeeper provisions. These include that the assessment of the reasonableness of the Direction must take into account in a significant way:

- the statutory, award, agreement and contractual entitlements of the employees affected by the Direction;
- whether the reduction of pre-existing entitlements to hours of work disproportionately and unfairly affects one category of employees over another; and
- whether full time and part time employees may, depending on the extent of their accruals, have access to leave entitlements to supplement their income, and full time employees who may have access to accrued rostered days off.

Following the decision, the FWC accepted the Company’s modified JobKeeper-enabling directions, which reduced the minimum fortnightly hours of full-time staff to 60, while it provided separate reductions in hours for part-timers and casuals.

[2020] FWCFB 3655

Disclaimer: This summary is a guide only and is not legal advice. For more information on JobKeeper Enabling Directions, call NECA Legal (WA) Pty Ltd on 6241 6129 or email necalegalwa@ecawa.org.au