FWC announces intent to temporarily amend Awards to provide new leave benefits

Articles Written by Lucienne Mummé (Partner), Evan Mentiplay (Special Counsel), Louise Russell (Special Counsel)

On 1 April 2020, the FWC announced a provisional view that it will amend 103 modern awards to include a new temporary Schedule that will operate until 30 June 2020, subject to review by the Commission or on application by an interested party.

There are two proposed forms of the Schedule.  The first form of the Schedule will:

  • provide all employees (including casual employees) with the option to take 2 weeks’ unpaid pandemic leave; and
  • enable full-time and part-time employees to, with the agreement of their employer, take twice the amount of their accrued annual leave at half-pay.

The second form of the Schedule to be included in the Hospitality Industry (General) Award 2010, Clerks–Private Sector Award 2010 and the Restaurant Award 2010, and which will provide only for the ability to take two weeks’ unpaid pandemic leave, but will not include the option to take annual leave at half-pay.  Those Awards have already been amended pursuant to applications by Unions and Employer Associations to include the ability to take extended leave at reduced rates.

The awards to include the proposed Schedule are all industry and occupational awards other than awards applying in the construction industry, awards applying in the maritime sector, and awards applying in the mining and resources sector.  Enterprise awards and public sector reference awards will also not be amended.  These proposed variations are described by the FWC as Phase 1, and the FWC may still make amendments to awards for the construction industry, the maritime sector, and the mining and resources sector.

The draft provision dealing with unpaid pandemic leave provides that an employee will be entitled to take unpaid pandemic leave if the employee “is required, by government or medical authorities or acting on medical advice, to self-isolate; or is otherwise prevented from working by measures taken by government or medical authorities in response to the COVID-19 pandemic in circumstances where the employee is required to work at premises operated by an employer.”

Accordingly, unpaid pandemic leave may not be available if an employee is able to perform their job away from their employer’s premises, including during a period of self-isolation.

Employees wishing to take unpaid pandemic leave must, on request, provide reasonable evidence of the need to take unpaid pandemic leave, and unpaid pandemic leave counts as service for the purposes of the relevant award and the National Employment Standards.

The draft provision dealing with the taking of annual leave at half pay provides that the agreement to do so must be in writing, and must be kept as an employee record.  The example provided in the draft clause clarifies that any annual leave loading payable under the relevant award will also be halved for the duration of the leave taken at half pay, but that the deduction from an employee’s leave balance must only be what would have been deducted for half the period at full pay (i.e. an employee who takes two weeks’ leave at half pay is only to be deducted one week’s leave).

Both the provision dealing with unpaid pandemic leave and the provisions dealing with annual leave at half pay include notes that state that the taking of such leave is the exercise of a workplace right for the purposes of the general protections provisions of the FW Act, and accordingly, an employer must not prevent an employee from exercising the right to take the leave, and must not take adverse action against an employee if they do take the leave.

The FWC will determine the matters following consideration of submissions from interested parties.

FWC approval of a variation to an enterprise agreement

In addition to the amendments to awards outlined above, on 2 April 2019, a Full Bench of the FWC approved a variation to an enterprise agreement in the matter of Application for variation of the CVSG Electrical Construction Enterprise Agreement - 2017-2021 [2020] FWCFB 1747, under which employees voted to forego negotiated pay rises under the agreement due to the impact of COVID-19 on the business.

The Full Bench, in its Decision, stated that a variation to an enterprise agreement still needs to result in the enterprise agreement passing the Better Off Overall Test once varied.  However, the FWC has previously stated that it may consider a variation that would result in an enterprise agreement not passing the Better Off Overall Test (for example, if the variation reduced rates of pay to a level below the underlying award), and that it may still approve such a variation under the “exceptional circumstances” provisions in s.189 of the FW Act, on the basis of that the impacts of COVID-19 are exceptional circumstances.  The Full Bench stated that it was most likely to consider such variations where the variation is stated to only have effect for a limited period, or is to assist in the revival of an enterprise heavily affected by the impacts of COVID-19.  This was not an issue that arose in the application by CVSG Electrical Construction, and the extent to which the FWC will consider a variation that would not meet the Better Off Overall Test has not yet been determined.

Important Disclaimer: The material contained in this article is comment of a general nature only and is not and nor is it intended to be advice on any specific professional matter. In that the effectiveness or accuracy of any professional advice depends upon the particular circumstances of each case, neither the firm nor any individual author accepts any responsibility whatsoever for any acts or omissions resulting from reliance upon the content of any articles. Before acting on the basis of any material contained in this publication, we recommend that you consult your professional adviser. Liability limited by a scheme approved under Professional Standards Legislation (Australia-wide except in Tasmania).

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