The Fair Work Commission has found that the stand-down of an employee was unfair, as there was no stoppage of work in his business division, despite a downturn due to the impact of COVID-19 in a case that indicates how the Commission will deal with changing business conditions during the pandemic.

Background

The Applicant was a clerk in a four person export documentation team within the head office of a large meat processing and wholesale food business.

The Applicant was stood down in early May, purportedly due to the impact of COVID-19 on the business. His ongoing duties were allocated to the three remaining team members who continued working their usual hours while he was stood-down.

After five weeks with no pay, the Applicant requested that he be made redundant, but the request was originally rejected by the employer.

A redundancy was eventually agreed to, however the Applicant sought the payment of his wages for the period of the stand-down, claiming that the stand-down was not authorised under section 524 of the Fair Work Act 2009 (Cth) (the “FW Act”) which requires that “a worker cannot be usefully employed due to … a stoppage of work for any cause for which the employer cannot reasonably be held responsible”.

No stoppage of work

The Respondent had not ceased operating at any time during the COVID-19 pandemic. While the processing operations entity within the group was significantly affected and approximately 300 employees stood down and eligible for the JobKeeper program, the Head Office entity that employed the Applicant was less effected and not eligible for JobKeeper at the time of the application.

The Applicant alleged that the stand-down of an employee was unfair in circumstances where:
• workload had not decreased at the time he was notified of the stand-down;
• the employer had not properly considered alternatives to a stand-down such as reduced hours across his team or redeployment; and
• the employer had not adequately communicated with him during the stand-down period.

Deputy President Anderson found no stoppage of work of a defined business activity as required by the FW Act, stating:
“Head office and the export documentation team experienced a downturn in overall work due to impacted supply chains. This warranted a reduction in hours worked. However, the work of head office continued. The work of the export documentation team continued.”
Deputy President Anderson found the stand-down of an employee was unfair and not compliant with the provisions of the FW Act, where there was no stoppage of work. Further stating a fair approach would have been for the employer to apportion the reduction between comparable employees in the export documentation team, rather than solely impacting the Applicant’s employment. The singular application of the stand-down to the Applicant was unfair.

In finding the 38 day stand-down was not consistent with the FW Act, because there was no stoppage of work, and taking into account fairness considerations, the Commission awarded compensation equating to 15 working days.

In determining compensation consideration was given to:
• the fact the Applicant was paid one public holiday and had elected not to use his seven days of accrued annual leave which may have mitigated his loss of income;
• the fact the employer was acting reasonably in an attempt to protect its business; and
• the likely work days under an apportioned working arrangement where the downturn impact was shared between comparable employees.

Key Takeaways

While recognising the material impact on the employer and the need to protect its own commercial interests, the Commission found the Respondent should have reduced hours across the Applicant’s team rather than standing down the Applicant.
The decision indicates that the Commission is keen for employers to spread the impact of COVID-10 related downturns fairly amongst employees.

The decision also confirms that in circumstances where the employer in ineligible for JobKeeper, and consequently cannot issue a JobKeeper Enabling Stand Down Direction, a downturn caused by COVID-19 is not necessarily sufficient to trigger s524 stand-downs where a stoppage of work cannot be established.

Mr Ryan La Plume v Thomas Foods International Pty Limited T/A Thomas Foods International [2020] FWC 3690 (15 July 2020)