A recent decision on 29 September 2020 by Commissioner Bissett of the Fair Work Commission has highlighted the expectation for employers to allocate work to employees rather than relying on stand down directions to manage its financial position during the coronavirus pandemic.
In Independent Education Union of Australia v The Peninsula School T/A Peninsula Grammar School  FWC 5180, The Peninsula Grammar School (PGS) stood down selected employees while students were learning remotely, following the Victorian Government’s directions issued on 2 August 2020 for Stage 4 restrictions. This resulted in 90% of PGS’s onsite facilities being forced to close.
Of those employees who were stood down, Ms Campbell and Ms Lees are library technicians and Ms Pearman is a classroom learning assistant. PGS submitted that it was unable to identify any useful work during the period of remote learning and that this was a ground for standing down the employees under section 524 of the Fair Work Act 2009.
Section 524 relevantly provides that: “an employer may stand down an employee during a period in which the employee cannot usefully be employed because of a stoppage of work for any cause for which the employer cannot reasonably be held responsible”.
The Commission held that a stoppage in the business of the school was a precondition for a stand down because without such a stoppage being made out, the stand downs could not be authorised by section 524.
Stoppage of Work
The Commission referred to a recent decision of the FWC by DP Anderson in Stelzer, where he commented:
(a) what constitutes a “stoppage of work” ….should not be so broadly construed as to include a mere downturn in business activity nor be so narrowly applied as to require the entire cessation of business activity; and
(b) the statutory phrase is a stoppage of work, not a stoppage of the business. For the stoppage of work some defined business activity with respect to which work is performed needs to cease, but not the cessation of business activity entirely.
Commissioner Bissett commented that a mere reduction in available work or a disruption to the way work is done would not alone constitute a stoppage. The terms “stoppage of work” in the legislation connoted a greater meaning than that and if the section was intended to allow stand downs when there are mere disruptions, it would have been specified with words other than “stoppage”. Furthermore, such a liberal interpretation of the section could consequently deprive employees of their fundamental entitlement to work under their employment relationship.
The Commission also found that there were 2 questions that it must ask itself in order to determine whether the requirements in section 524 are satisfied:
- Was there a stoppage of work? If the answer is no, then no further enquiry is necessary; and
- If the answer to 1 is yes, was the cause of the stoppage for a reason for which the employer could not reasonably be held responsible?
Ms Pearman (classroom learning assistance)
PGS argued that the suspension of classroom learning meant that Ms Pearman’s assistance was no longer required during Stage 4. The Commission observed that the role of PGS is to provide an education to its students. However it did not accept, as PGS submitted, that the business activities to educate were tied to being onsite.
The Commission had no doubt that during the period in which students are learning remotely, the business activities and core responsibilities of PGS continued. Though the delivery of teaching was admittedly different, classes were still running and teachers were still engaging with students. Accordingly, it could not be said that Ms Pearman’s role as a classroom assistant is constrained to the physical delivery of learning in the classroom and ceases when learning is transitioned to being online. The Commission concluded that there had been no stoppage of work for Ms Pearman.
Ms Lees and Ms Campbell (library technicians)
It was clear that there had been a reduction in demand on the library and that some of the work in the library had ceased. However, a few matters came into evidence before the Commission which implied that work had not stopped entirely. Firstly, students and teachers were still using the library online despite not having access to the library’s physical space. Secondly, the librarian had not been stood down which implied that work was still being provided. And lastly, PGS had intended to have the library books relabelled but suspended those plans for the time being as it was not a priority.
The Commission stated that just because PGS did not wish to have relabelling work done at a particular time could not establish that the work of the library had stopped for reasons beyond PGS’ control. Rather it showed that the work had stopped simply because of a direct decision by PGS. As such, the Commission found that there was no stoppage in the business activity of the library.
PGS implored the Commission to take into account fairness between the parties in dealing with the dispute, as required by section 526(4) of the Fair Work Act 2009. In particular, PGS contended that the Commission should have regard to economic considerations from the school’s perspective.
While the Commission acknowledged that PGS had been impacted by the need to teach students remotely and that it had suffered a reduction in income, it stated that PGS’ version of fairness seemed to weigh heavily in its favour. As the requirement is fairness between the parties the Commission refused to constrain the notion of fairness to just the financial considerations of the employer.
The Commission noted that consequences of a stand down on employees can be immense. Active employment not only provides an economic benefit but also the feeling of self-worth that comes from employment. Accordingly, a minimisation of losses on wages cannot possibly outweigh the impact on stood down employees. Given the importance of work, the Commission held that a stand down direction should not be made simply to resolve a financial strain on the employer.
In any event, the Commission found that notions of fairness in section 526(4) do not justify the stand downs remaining where PGS has no jurisdictional right to stand down because there is not a stoppage of work.
The Commission was satisfied that, in both the library and classroom teaching environment, there had been no stoppage of work for reasons beyond the control of PGS. As the necessary pre-requisite grounds had not been met, the stand down of the employees by PGS were not made in accordance with section 524 of the Fair Work Act 2009. Additionally, the issue of fairness does not justify the stand downs remaining where the prerequisite in section 524 for a stoppage of work has not been met. Hence PGS was ordered to withdraw the stand down directions..
While businesses continue to struggle during these unprecedented times, this decision by the Fair Work Commission is a reminder that the stand down provisions in the Fair Work legislation only allow employers to stand down staff in limited circumstances outside of the JobKeeper rules.
The glaring issue is that section 524 was not drafted with a pandemic or even the potential of working from home in mind. It is manifestly inadequate as a tool for employers who are bleeding financially in the current COVID-19 climate to use as a means of protecting both business solvency and permanent job losses.
This decision may yet be appealed.
If your business is impacted on by these issues or you would like any advice on this area, please contact the Employment Team at Hunt & Hunt.
~ with Michelle Nguyen, Graduate-at-Law