An employer that issued a JobKeeper enabling stand down direction, reducing an employee’s hours by 40 per cent has been ordered by the Fair Work Commission to amend the reduction to just 20 per cent. The Commission held that the direction was unreasonable because of its “overwhelmingly precautionary” nature.¹
JobKeeper powers for employers
Pointon Partners has previously written about the temporary powers given to JobKeeper employers here. The powers include the ability to partially stand down an employee without pay for any period in which they can’t be usefully employed.
Employers, employees and their representatives can raise disputes with the Fair Work Commission about stand downs and directions. The Commission may deal with disputes in whatever way it sees fit, including by issuing binding directions following arbitration.
Background to the decision
Live Events Australia Pty Ltd is a media company which, amongst other operations, contracts to broadcast horse racing events held in Victoria and Western Australia.
Live Events issued a JobKeeper enabling stand down direction to one of its full-time broadcast engineers, specifying that his minimum hours of work would be reduced from 80 to 48 hours per fortnight.
The employee filed proceedings with the Commission, alleging that the direction was “unreasonable in all the circumstances”, considering the minimal impact COVID-19 had on racing events in Western Australia and the fact that he continued to be rostered on for at least 80 hours per fortnight.
The Commission rules on the stand down direction
The Commission held that issuing a stand down direction to the employee was reasonable due to the “substantial and material” impact of COVID-19 on the operations of Live Events as a whole.
However, the terms of the direction were unreasonable, because Live Events had “overplayed its hand” by effectively issuing the direction as a contingency, in case the employee’s hours needed to be drastically cut in the future.
Although a precautionary stand down direction isn’t unreasonable per se, the proposed 40% reduction was inconsistent with the actual circumstances, in particular that horse racing had continued “relatively uninterrupted”, albeit without crowds.
The Commission therefore ordered an amendment to the direction limiting the possible reduction in hours to 20%, before warning Live Events that the partial stand down should only be exercised if actually necessary.
Lessons for JobKeeper employers
The amendment to the stand down direction is a clear reminder from the Commission that JobKeeper employers do not have carte blanche to reduce staff hours.
Careful consideration must be given before issuing JobKeeper directions, which need to be reasonable and not extend beyond what the employer’s present circumstances dictate.
Pointon Partners can assist with any queries relating to JobKeeper. Please contact Michael Bishop, Amelita Hensman or Ben Drysdale to discuss.
[1] Allan Jones v Live Events Australia Pty Ltd [2020] FWC 3469 (3 July 2020).
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