The Federal Court has provided clarity on the “minimum payment guarantee” contained in section 789GDA of the Fair Work Act 2009 (Cth) (the “Act“) in a ruling that may lead to backpay claims against employers utilising the scheme. Dubbed the “Qantas JobKeeper Case” this case is of particular relevance to employers who pay employees for overtime in arrears.

A copy of the case Qantas Airways Limited v Flight Attendants’ Association of Australia (the “Qantas JobKeeper Case”) [2020] FCA 1365 is available here.

Background

Section 789GDA of the Act states that if a JobKeeper payment is payable to an employer for an employee for a fortnight, the employer must ensure that the total amount payable to the employee in respect of the fortnight is not less than the greater of the following:

(a) the amount of the JobKeeper payment payable to the employer for the employee for the fortnight; or

(b) the amounts payable to the employee in relation to the performance of work during the fortnight.

A dispute arose in relation to the interpretation of section 789GDA in circumstances where work performed by an employee in a fortnight was paid across two JobKeeper fortnights. This arose as the pay arrangements for some Qantas staff meant that the fortnightly pay included various other payments and allowances based on actual hours worked in the previous fortnight.

By way of example, an employee could perform both work and overtime contractually entitling them to receive $3,000 but, in accordance with the accounting practices of the employer, the employee may receive the wages component in one JobKeeper fortnight and the overtime component in a subsequent JobKeeper fortnight. The question was whether such overtime amounts paid in arrears where “amounts payable to the employee in relation to the performance of work during the fortnight”.

One of the factual difficulties confronting the application of this subsection was the fact that an employee may (for example) not be entitled to receive any amount of money for work performed during any given fortnight because he may have been stood down during that fortnight, but he may nevertheless receive monies for work performed in a previous fortnight.

Qantas asserted that the correct construction of section 789GDA(2)(b) required consideration of the amounts paid to the employee during the fortnight for work performed, “regardless of whether or not the amount paid is a payment made, in whole or part, in satisfaction of obligations with respect to work done or entitlements accrued either during or before the relevant fortnight”. This construction was rejected by Justice Flick.

Findings

In the Qantas JobKeeper Case, Justice Flick rejected the argument “that ambiguity arises as to whether the phrase “during the fortnight” qualifies only the period during which work is performed or applies more generally. He concluded that the statutory phrase “means what it says – namely, s 789GDA(2)(b) identifies that the amount of money which is payable to an employee for the work performed by that employee during that fortnight.”

Justice Flick confirmed that the subsection operates “as referring only to the monies an employee is contractually due to receive during any given fortnight for work performed during that same fortnight; monies that may nevertheless be contractually required to be paid during a given fortnight but for work performed in a previous fortnight are not monies payable “in relation to the performance of work during the fortnight”.

Whilst Justice Flick noted that this interpretation may result in employees benefiting from a “windfall”, he concluded that it was a matter for the Legislature to “tweak” or adjust the JobKeeper Scheme if it sees fit.

Civil Penalties

While section 789GDA is a civil penalty provision, the union abandoned any relief in the form of penalties for any contravention of the JobKeeper Scheme. Justice Flick considered this to be the correct position noting that no submission was advanced suggesting Qantas had an “ulterior objective” in its actions.

Prospect of Appeal

Despite this finding, employers should watch this space as Qantas is considering whether to appeal this decision.

Please note that Qantas successfully appealed the Qantas JobKeeper Case and we have written an updated blog on the matter.

Associate