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2020’s four industrial developments in the chaos of COVID

We look at four industrial outcomes of the pandemic.
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2020’s four industrial developments in the chaos of COVID

2020’s four industrial developments in the chaos of COVID

15 December 2020

By Australian Business Lawyers & Advisors

Much maligned as a broken system on its last legs, in 2020 the Australian industrial relations system was electroshocked into a state of responsiveness.
 
We look at four industrial outcomes of the pandemic and ponder what they could mean once we transition from ‘the unprecedented new normal of uncertain and difficult times’.


Schedule X

The introduction of quarantine and isolation orders into the lives of ordinary citizens presented an immediate (at least theoretical) industrial problem; an employee may not be unwell, but still may be unable to work for 14 days (or until in possession of a negative COVID-19 test). For those unable to take annual leave, this left employees being forced into absences that they were not entitled to take.

Enter the Fair Work Commission (FWC).
 
With consent from all parties, on 8 April 2020, the FWC made determinations temporarily varying 99 modern awards, adding an entitlement to 2 weeks’ unpaid pandemic leave (to be taken for the purposes of quarantine/isolation).
 
An annual leave flexibility clause was also inserted into these modern awards, allowing employees, by agreement, to take twice as much annual leave at half their normal pay.
 
These variations were included in the thrillingly named ‘Schedule X’.
 
While the effect of these variations are temporary (the entitlement is progressively disappearing from modern awards and currently is due to expire from a majority of awards on 21 March 2021), the creation of Schedule X is instructive of a number of things.
 
Firstly, it demonstrates the possibility of rapid progress in industrial relations when employer representatives and unions come to consent positions. If more fundamental variations to industrial standards are going to take place, negotiation rather than disputation between business and unions seems to be the most fruitful course.
 
Secondly, it demonstrates the agility of the FWC (whose jurisdiction allows it to vary modern awards) in comparison to parliament when it comes to filling legislative gaps in the Fair Work Act.
 
Schedule X presented an immediate and simple solution to a problem as it arose. The FWC should be commended on its initiative and efficiency in instigating these changes.
 
It’s not clear whether the circumstances of the pandemic will be such that Schedule X (or some form of it) will need to form an enduring part of the safety net. What can be said is that if a ‘legislative gap’ is identified, the FWC will fill it if it can.


The case for paid pandemic leave

Alongside the straightforward introduction of the unpaid Schedule X leave entitlements, unions in 2020 sought a paid form of pandemic leave in the ‘health awards’.
 
These claims sought broad paid pandemic leave entitlements for ‘health workers’ (a broad definition which included not just doctors and nurses but pharmacists, social and community workers, ambulance workers and more).
 
These claims were opposed by employers on a number of grounds including that the claims as filed would entitle employees to paid leave regardless of the reason they needed to isolate (i.e. it required no connection to employment) and would entitle employees to an amount of leave that would essentially be unlimited.

The FWC initially rejected the claim in its entirety, before the ‘second wave’ of infections in Victoria saw a more limited 2-week entitlement introduced into 3 modern awards connected to residential aged care. This entitlement has come to be known as ‘Schedule Y’ leave.
 
The commission’s approach in the health awards demonstrated the far greater difficulties that arise when paid leave entitlements are sought (and obviously when such claims are opposed by employers).

These proceedings also threw up the conceptually difficult idea of paid leave for casual employees particularly in the labour hire space.
 
Should further pandemics arise (or the current one take a further turn), these proceedings will provide a historical template to determine whether a case for variation has been made out.


The JobKeeper changes

The FWC has not been the sole instigator.
 
As everyone should know, the government’s JobKeeper package made a number of significant, but temporary, changes to the Fair Work Act for employers and employees who have access to the JobKeeper wage subsidy.
 
Most interestingly, these temporary changes override ANY term of an:
  • employment contract;
  • modern award; or
  • enterprise agreement.

Under the changes employers who qualify for and receive JobKeeper are allowed to do the following:
  1. Issue directions requiring an employee to work reduced hours or days, undertake alternative duties; or work at an alternative location.
  2. Make requests of an employee to work different days/times to their ordinary hours/days and to take accrued annual leave.
  3. Agree with employees for double annual leave at half pay.

On any conventional view these amendments were extraordinary. These changes fundamentally disturbed the bedrock of the employment relationship - the employment contract (as well as the supporting structures of industrial instruments like awards).

Due to the temporary nature of JobKeeper, these changes are unlikely to have any lasting effect in of themselves. What appears to have changed however is this government’s appetite for pursuing Fair Work Act changes.
 
In addition to the JobKeeper amendments, other relatively minor variations have been made to enterprise bargaining rules during the pandemic.
 
Most intriguingly however, on the invitation of the government, industrial stakeholders have been engaged in ‘working group roundtables’ throughout the year with a yet to be publicised omnibus industrial relations reform bill to hit the parliamentary shelves before Christmas. Precisely what this bill will seek to address is not yet clear but will no doubt address some of the longstanding issues arising from the Fair Work Act and perhaps make some accommodation for the bumpy economic journey ahead.


Working from Home

2020 was the year HR sent everyone* in the office home. (*for those in the front line who kept the world running, I thank you).
 
This threw up questions (and endless online content) about how office life would look in the future. This also had industrial consequences.
 
In March, an employer application was filed to insert a new schedule, ‘Schedule I’ into the Clerks Award. The introduction of JobKeeper laws has meant that this initial schedule is less relevant now than it was in March 2020. A modified form of Schedule I was extended by a decision on 30 June 2020.

This modified Schedule provided flexibilities for employers in relation to:
  • the spread of ordinary hours of work for employees working from home;
  • agreed temporary reductions in the ordinary hours of work; and
  • the taking of annual leave.

Considerable interest in this development related to the flexibilities arising from the spread of ordinary hours. If it suits an employee to work early mornings and late nights from home; why shouldn’t this more flexible approach be accommodated in modern awards as ‘ordinary time’?
Following on from developments in the clerical industry, the FWC on its own initiative made moves to address the new way in which employers and employees are working from home.
 
The commission issued a statement in August 2020 proposing a series of flexibility clauses to address new working conditions including the working of compressed hours into fewer days. The commission also requested that employer membership organisations conduct a survey regarding working from home practices for clerical and administrative employees.
 
It is possible that, once the survey and discussion processes are complete, there will be a more formal consideration of the types of award provisions that are required to address working from home arrangements.
 
Of all the industrial developments in 2020, the transition of work from office spaces to personal spaces seems the most fundamental.
 
Throughout the pandemic, both employees and employers have seen benefits while at the same time hitting ‘industrial blind-spots’ that arise when rapid changes to work patterns occur.
 
Does the reduction in travel costs for an employee offset the cost providing your own office? What will become of performance tracking and management when your boss rarely sees you? How do you ensure the safety of employees? What will increased autonomy do to productivity? What will differentiate good employers from average ones?
 
These questions will need to be answered both at an enterprise level but also on an economy-wide scale. While there are advantages for everyone, risks abound.
 
As you have been trying to do the lot in 2020; keep your head on a swivel, your eyes open and continue to adapt.

Written by Julian Arndt, Associate Director at Australian Business Lawyers & Advisors

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