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JobKeeper direction was unreasonable, bench rules

A union has successfully challenged a JobKeeper-enabling direction.
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JobKeeper direction was unreasonable, bench rules

JobKeeper direction was unreasonable, bench rules

20 July 2020

A union has successfully challenged a decision that a JobKeeper-enabling direction was reasonable.

The dispute related to a direction by Prosegur Australia that employees at its Moorooka Queensland depot be offered a minimum of 25 hours a week.

Prosegur is engaged in the 'cash in transit' business and its Moorooka depot employs 25 armoured vehicle operators – eight full-time and six part-time permanent employees, and 11 regular long-term casuals.

Last month, the Fair Work Commission ruled that the employer's direction was not unreasonable.

The Transport Workers Union appealed the decision on the following grounds:

  • The deputy president erred in construing and applying s789GK of the Act and failing to resolve the dispute by:
    • failing to analyse and assess the reasonableness or otherwise of the JobKeeper-enabling direction issued on 3 June 2020
    • taking into account and/or focusing exclusively on the number of hours employees had worked prior to the direction coming into effect.
  • The deputy president erred by mistaking the facts in holding that full-time and part-time employees were not working 25 hours a week and, in the case of full-time employees, were working close to or in excess of 38-hours a week.

Appeal granted

A full bench bench found deputy president Sams "proceeded upon an incorrect construction of the meaning of the expression 'unreasonable in all of the circumstances' in s789GK.

"The result was that the deputy president posited a standard of review of JobKeeper-enabling directions which resembles the Wednesbury standard of legal unreasonableness or irrationality in the context of judicial review of administrative action and excludes notions of unfairness and inequity as between the employer and employee. We consider this approach to be in error when regard is had to the statutory context."

The bench said the incorrect approach "meant that there was a failure to properly take into account the relevant circumstances of employees in the assessment of the reasonableness of the direction".

It also found the deputy president "did not direct himself to the substance of the direction itself, which in terms reduced the hours of work of all remaining employees to 50 per fortnight, but rather assessed the reasonableness of the direction by reference to the hours table. The deputy president’s reasoning appears to have been that the direction was not unreasonable because the hours table showed that full-time employees would receive well in excess of the 25 hours, notwithstanding what the direction actually said. This was an erroneous approach because:
  1. The hours table was concerned with a period before the direction came into effect, and thus was not illustrative of the effect of the direction.
  2. It was the reasonableness or otherwise of the direction which the deputy president was required to consider, which in terms reduced hours to 50 per fortnight. The deputy president was not entitled to determine that the direction was not unreasonable by reference to a factual scenario which is at odds with what the direction actually said."

The bench noted: "We consider that the assessment of the reasonableness of the direction must take into account whether the deprivation or reduction of pre-existing entitlements to hours of work disproportionately and unfairly affects one category of employee over another. Prima facie, the direction imposes a disproportionate reduction in entitlements for full-time employees."

The bench found the appeal raised an issue concerning the proper interpretation and application of s 789GK "which is new and of general importance".

Permission to appeal was granted.

The parties were directed to confer "having regard to the propositions above as a matter of urgency" and, should the dispute not be resolved, to make any further submissions before Friday 17 July.

The dispute will then be re-determined by arbitration.

Read the judgment

Transport Workers' Union of Australia v Prosegur Australia Pty Limited (C2020/5070)[2020] FWCFB 3655

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