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JobKeeper recipient claws back hours

An employer has been ordered by the FWC to increase an employee's hours.
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JobKeeper recipient claws back hours

JobKeeper recipient claws back hours

8 July 2020

An employer that reduced an employee's work hours by 40% on the JobKeeper scheme has been ordered to increase his hours back up to 80% of the original. The employee had been working 80 hours per fortnight, but the employer cut them to 48 per fortnight.

The Fair Work Commission, however, ruled that this was too harsh and ordered that his hours be increased to 64 per fortnight.

The decision provides insight into the criteria employers need to use when proposing to issue JobKeeper-enabling directions to reduce employees’ working hours during COVID-19.


Facts of case

The employee was a broadcast engineer at a media company that had the rights to broadcast various sports events. Most of the employee’s work was broadcasting horse races, which was only temporarily interrupted by COVID-19 restrictions. Evidence was presented that close to the usual amount of work remained available, although overtime for full-time employees was reduced.

The employer had requested in March 2020 that almost all its employees accept a 40% reduction in working hours and pay as a COVID-19 contingency measure. The employee in this case was the only one who refused the request, so his contract was not varied until he received the direction reducing his hours in June 2020. The FWC agreed with his claim that racing events in his state (WA) “had not been materially interrupted”.

The employer had argued that there could be “unscheduled interruptions” to the broadcasting of races, but the FWC said that the employer had exaggerated this risk. The employer also argued that COVID-19 had severely impacted its overall business and reduced revenue. The FWC found that this had occurred to a sufficient level to establish JobKeeper eligibility, however horse racing had been “relatively uninterrupted”, apart from no on-site crowds and use of social distancing rules. The overall impact this had on the broadcasting workforce was to reduce the use of overtime and casual employees, but there was little impact on the workload of full-time positions such as broadcast engineers.

The employer later notified employees that the 40% reduction would be eased to 20% in June 2020 and predicted that hours and pay would return to normal in July 2020 (later delayed to August 2020).

The FWC said that employers needed to take the following steps before reducing employees’ hours for COVID-19-related reasons:
  • Base the decision on objectively-assessed operational requirements (in this case broadcasting hours still available)
  • First explore reasonable alternatives to an hours or pay reduction, such as redeployment to other suitable jobs, retraining or using leave entitlements.

The FWC added that it would be inappropriate for the employer to leave any direction in place if it restored the working hours of other employees back to 100%.


Decision

The FWC ruled that standing down the employee to enable JobKeeper registration was a reasonable decision in the circumstances and that the manner of doing so was compliant. This took into account the possibility that horse racing could be curtailed by a future unpredicted COVID-19-related event. However, the reduction in the employee’s hours had been too drastic, as the employer continued to roster the employee to work similar hours to before, and his pay exceeded the JobKeeper subsidy amount.

Finding that the employee had continued to work close to his usual 80 hours per fortnight, with only the loss of some of his overtime, the FWC ordered that the direction that his hours had been reduced by 40% be changed to a reduction of only 20%. The latter amount more accurately reflected the position of the business at the time of standing down the employee (June 2020).

The bottom line: Employers who seek to issue directions for JobKeeper purposes that employees’ working hours have been reduced need to have objective evidence that there really has been a reduction in work available that matches the hours reduction. The FWC may also require the employer to have first considered alternative arrangements such as redeployment, retraining or reducing leave accruals.
Read the judgment

Jones v Live Events Australia Pty Ltd [2020] FWC 3469, 3 July 2020

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