- The Fair Work Commission (‘FWC‘) has responded to the COVID-19 crisis by amending modern awards to increase the flexibility available to businesses.
- Some 99 modern awards have been varied to include two weeks’ unpaid pandemic leave and additional flexibility in relation to annual leave.
- The FWC is experiencing a significant increase in its caseload as a result of COVID-19, including unfair dismissals.
In the first of this two-part series, we examined the Federal Government’s historic JobKeeper legislation (Connolly & Flamingh, ‘COVID-19: Employment law responds’, 66 Law Society of NSW Journal, May 2020, 88-90). This month, we turn to an examination of the changes implemented or facilitated by the Fair Work Commission (‘FWC‘).
The FWC has played an active role, both proactively and reactively, in responding to the COVID-19 crisis. The demand on the FWC is such that it has requested extra resources from the Federal Government to deal with an increase in its overall caseload of 40 per cent. This increase is largely comprised of unfair dismissal claims (which increased by 60 per cent in April compared to 2019) and general protections claims (which rose by 20 per cent in April compared to 2019), as well as approximately 200 disputes lodged thus far in relation to the JobKeeper Scheme.
Variations to modern awards on application
In addition to managing the increase in disputes, the FWC has responded to the impact of the COVID-19 pandemic by expediting the approval of applications for the insertion of COVID-19 flexibility schedules into certain modern awards to manage industry-specific workforce issues. The flexibility schedules have been included in the following modern awards: the Clerks – Private Sector Award 2010 (‘Clerks Award’); Hospitality Industry (General) Award 2010 (‘Hospitality Award’); Restaurant Industry Award 2010 (‘Restaurant Award’); and the Educational Services (Schools) General Staff Award 2010 (‘Education Award’).
The President of FWC, Justice Ross has stated that the consultation and consent between unions and employer associations had been a ‘key consideration’ for the FWC in handling the applications to vary awards, and helped the FWC to ‘move quickly in a number of these matters’.
In addition to the above awards, there are applications pending to vary the Fast Food Industry Award 2010; Real Estate Industry Award 2010; Legal Services Award 2010; Social, Community, Home Care and Disability Services
Industry Award 2010; and Vehicle Manufacturing, Repair, Services and Retail Award 2010.
Variations to Clerks Award
The Clerks Award has broad application, and the FWC has granted an application to introduce a series of special conditions as a new ‘Schedule I’ to the Clerks Award. These conditions will operate until 30 June 2020, unless extended by application. The newly-inserted Schedule I includes the following key provisions:
- Employers may temporarily reduce the hours of work of permanent employees in the whole business or a section of the business to not less than 75 per cent of their full-time ordinary hours or agreed part-time hours. These temporary reductions may only be implemented with the approval of at least 75 per cent of the affected full-time and part-time employees.
- An employer and employee can agree to take up to twice as much annual leave at a proportionately reduced rate for all, or part of, any agreed or directed period away from work, including any close-down.
- Employers can direct an employee to take annual leave (including for a close-down) on giving at least one week’s notice, unless a shorter notice period has been agreed with the employee. In the case of a close-down, employees are entitled to unpaid leave where they do not have enough accrued leave to cover the full period.
- An employee can, by agreement with their employer, change their span of hours to allow them to work between: 6am and 11pm, Monday to Friday; and 7am and 12.30pm, Saturday.
- Employers can direct employees to perform any duties that are within their skill and competency regardless of their ee has the necessary qualifications to perform them.ordinary classification with no reduction in the employee’s pay, provided that the duties are safe and the employ
Variations to Hospitality Award and Restaurant Award
The FWC has also granted applications to insert closely-aligned COVID-19 flexibility schedules into the Hospitality Award and the Restaurant Award. The variations will operate until 30 June 2020, unless extended by application. The key provisions of the newly-inserted schedules are:
- An employer may, following consultation with any affected employees, direct:
- a full-time employee to work an average of between 22.8 and 38 ordinary hours per week, with payment made on a pro-rata basis.
- a part-time employee to work an average of between 60 per cent and 100 per cent of their guaranteed hours per week, or per roster cycle.
- Employers may direct employees to take annual leave with 24 hours’ notice, subject to consideration of an employee’s personal circumstances. Employees that take annual or personal leave will be paid leave based on their ordinary hours of work prior to the commencement of the relevant schedule.
These amendments do not prevent an employer and employee reaching a separate agreement in relation to the employee taking annual leave. Further, during the operation of the relevant schedules, such an agreement may be for an employee to take twice as much leave at half the rate of pay for the period of annual leave.
In addition, the newly-inserted schedule to the Restaurant Award provides that an employer may require an employee to take annual leave as part of a close-down of its operations, or part of its operations, by giving at least one week’s notice, or any shorter period of notice that may be agreed. Employees are entitled to unpaid leave in these circumstances if they do not have enough accrued leave to cover the full period. (This provision has not been inserted into the Hospitality Award.)
Variations to Education Award
The Education Award now includes a new ‘Schedule J’ which is expressed to operate until 1 August 2020, although the possibility of extending it has already been noted by the FWC. The principal change under Schedule J is that an employer may issue a written notice of intention to a full-time or part-time employee, directing them to temporarily reduce their ordinary working hours by up to 25 per cent for a specified period. The direction comes into effect five days after the notice of intention is issued to the employee and may only remain in force for up to 12 weeks.
Also under Schedule J, employees can be directed to perform any duties that are within their skill and competency (even if they are lesser duties) regardless of their classification, provided the duties are safe and the employee is licensed and qualified to perform them.
Unpaid pandemic leave
The FWC has also moved on its own initiative to vary 99 modern awards by introducing two weeks’ unpaid pandemic leave and the capacity for an employee to take up to twice as much annual leave at half pay (Fair Work Act 2009 (Cth) (‘FWA’), s 157(3) – Variation of awards on the initiative of the Commission  FWCFB 1837). The changes are provisionally in place until 30 June 2020. While applying to 99 awards, this variation does not include awards applying in industries less affected by the pandemic, including the maritime and mining and resource sectors.
Unpaid pandemic leave is now available for employees who are required to self-isolate, or are otherwise prevented from attending work, by measures taken by government or medical authorities in response to COVID-19. The pandemic leave:
- is available in full immediately, rather than accruing progressively during a year of service;
- must commence on or before 30 June 2020;
- is available to full-time, part-time and casual employees (not pro-rated);
- constitutes a ‘workplace right’ for the purposes of the general protections under the FWA; and
- is available to employees who have not yet exhausted their paid leave entitlements.
Again, the changes include a new term providing additional flexibility in relation to annual leave, which states that an employer and employee can agree to take up to twice as much annual leave at half the rate of pay. This is a similar provision to those referred to above in the Clerks, Hospitality and Restaurant Awards.
The FWC has listed a separate hearing to address issues raised in respect of the particular circumstances of health care workers.
Variations to enterprise agreements
The FWC has expedited applications to vary enterprise agreements in circumstances where doing so would provide additional flexibility for employers and employees to help address the impact of the COVID-19 pandemic.
The requirements for varying an agreement are similar to those for approving a new agreement, including that the agreement as varied must pass the ‘better off overall test’ (the ‘BOOT’). Any variation to an enterprise agreement must be approved by the majority of employees covered by the agreement who vote on the variation. Before employees vote on a variation to their agreement, the employer must take many of the same steps as required to make a new enterprise agreement.
In one of its more controversial changes to industrial laws during this crisis, the Federal Government has shortened the period during which employees need to have the proposed variation and accompanying explanatory material from seven days to one day. The objections of several unions to this reduction has led to the Federal Government announcing that it will issue new regulations to limit the operational period of enterprise agreements that are altered using the shorter access period to 12 months. Minister for Industrial Relations, Christian Porter, has stated that the new regulations will strike a reasonable compromise between the concerns of the unions and employers’ need for flexibility in these challenging times.
Section 189 of the FWA allows for the approval of an agreement that does not pass the BOOT if, because of exceptional circumstances, approval of the agreement would not be contrary to the public interest. Section 189(3) itself provides that: ‘an example of a case in which the FWC may be satisfied exceptional circumstances exist is where the agreement is part of a reasonable strategy to deal with a short-term crisis in, and to assist in the revival of, the enterprise of an employer covered by the agreement.’ This would seem apposite in the present circumstances.
The FWC has established an email account for urgent applications to deal with the consequences of COVID-19 such as applications to vary enterprise agreements or other instruments. The email address for these applications is COVID19Applications@fwc.gov.au.
Since commencement of the COVID-19 pandemic, employers and employees have been attempting to navigate these unprecedented times within an existing employment law framework that was criticised by many for its rigidity. The swift changes implemented by FWC, in addition to managing its increasing caseload, have assisted in introducing greater flexibility for both employers and employees in dealing with these challenging times.
Time will tell how long the temporary flexibilities are needed. There are already calls for the changes to become the so-called ‘new normal’, and the Government to introduce reforms that will increase flexibilities to the labour market. Employment law remains as dynamic as it is real.