On 18 May 2020, the Federal Court ruled [1] that Qantas does not have to pay personal (sick)/carer’s leave or compassionate leave to any of its more than 20,000 workers who apply for that leave after being temporarily stood down without pay amidst the COVID-19 pandemic.

The judgment does not address directly the question of whether employees already on sick/carer’s/compassionate leave before the stand down retain their right to stay on paid leave – but, implicitly, the same rule applies to those employees.

In making this decision, Justice Geoffrey Flick dismissed two applications by the TWU and the Qantas Engineering Alliance – comprising the AMWU, AWU and CEPU – in which the unions argued that the airline was required to allow its employees, who had been stood down under s 524 of the Fair Work Act 2009 (Cth) (FW Act), access to paid sick leave, carers’ leave and compassionate leave.

The unions relied on s 525 of FW Act, under which a worker is not taken to be stood down while:

  • taking paid or unpaid leave that is authorised by the employer; or
  • otherwise authorised to be absent from his or her employment.

The unions argued that an employee who takes personal/carer’s or compassionate leave is (as a result) ‘authorised to be absent’ from his or her employment. Accordingly, an employee who takes such leave should not be taken as having been stood down, and the employer must pay the employee for the leave period.

At the heart of the Court’s decision in rejecting this argument was the concept that leave entitlements are granted to relieve an employee from work that is required to be performed. The Court characterised the leave entitlements as a ‘form of income protection’, which presupposes that an employee is in receipt of income. ‘Income’ cannot be protected if there is no available or required work from which an employee could derive income. Accordingly, if they are lawfully stood down under s 524 of the FW Act because there is no work for them to do, and thus no income available for the employees to earn, leave entitlements are also not available to them.  In fact, ‘to permit such an employee to nevertheless access personal/carer’s leave whilst stood down would be to allow them to “cash out” their leave entitlements’ contrary to the FW Act.

Interestingly, Justice Flick found that no different conclusion is reached if the source of power to stand down employees and the entitlement of employees to access their leave entitlements is to be found in an enterprise agreement, as opposed to the FW Act. However, it is not entirely clear whether the same conclusion would be reached if an employee was stood down under the new JobKeeper scheme.

The TWU has said that it is looking to appeal the ruling, which means that this position might change in the near future. In addition, the decision relies heavily on the recent Full Court of the Federal Court decision in Mondelez v Australian Manufacturing Workers Union [2] which is itself currently on appeal to the High Court.  For now, however, this decision gives employees and employers much-needed guidance as to an employee’s entitlements while stood down without pay.

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Authors

Jacquie Seemann  | Partner | NSW | +61 2 9020 5757 | [email protected]
Alessia Moujaes | Law Graduate | NSW |

The authors acknowledge the contributions of  Lauren Townsend and Elodie Bethuel.

[1] Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Qantas Airways Limited [2020] FCA 656

[2] [2019] FCAFC 138 at [148]