In response to the COVID-19 virus outbreak, the Australian Fair Work Commission (FWC) has temporarily varied 99 modern awards to provide increased flexibility in the use of leave entitlements, including the introduction of an unpaid pandemic leave entitlement and the option for an employee to take doubled up periods of annual leave at half pay.
Leave arrangements
In Australia, the minimum leave entitlements and obligations of employees and employers are set out in the National Employment Standards (NES) and Modern Awards.
The FWC’s recent determination inserts a temporary schedule into 99 Modern Awards (Schedule). The Schedule varies and supplements existing Award provisions in order to assist businesses dealing with decreased trade and employees who are required to comply with quarantine or self-isolation restrictions.
The measures apply from an employee’s first full pay period on or after 8 April 2020 until 30 June 2020 (and this period can be extended on application to the FWC).
The principles outlined in this information sheet are for guidance only and specific responses and advice will vary depending on the particular facts and circumstances. What follows below is therefore general information only and should not be relied upon as legal advice.
Which Modern Awards have been varied?
The vast majority of Modern Awards (99 in total) have been temporarily varied by the FWC’s determination as above – a complete list is here.
The FWC has determined that some industries, such as the construction industry, are not yet adversely impacted by COVID-19 in such a way that warrants a change to the applicable awards. To this end, the following Modern Awards are currently excluded from the recent amendments:
Electrical, Electronic and Communications Contracting Award 2010;
Electrical Power Industry Award 2020;
Plumbing and Fire Sprinklers Award 2010; and
Fire Fighting Industry Award 2020.
The inclusion of a new provisions regarding “Pandemic Leave”
The Schedule provides that an employee employed under a varied Award may, at the employee’s election, take up to two weeks of unpaid leave if the employee is required, by government or medical authorities, or where acting on the advice of a medical practitioner, to self-isolate, and is consequently prevented from working, or is otherwise prevented from working, by measures taken by government or medical authorities in response to the COVID-19 pandemic. The employer and employee may agree that the employee may take more than two weeks’ unpaid pandemic leave. The period of pandemic leave must commence before 30 June 2020.
Employees must give their employer notice of the taking of such pandemic leave as soon as practicable (and this may be a time after the leave has commenced). The notice must set out the reasons for requiring such leave and how long the employee expects to be off work. The Schedule does not set out a process or other requirements for the provision of such notice (i.e. whether written notice is required), so the parties will need to look to the notice provisions in the relevant employment agreements to ensure compliance.
If required by the employer, the employee must also provide evidence that would satisfy a reasonable person that the leave is taken for one of the reasons mentioned above.
Unpaid pandemic leave will count as service for the purposes of calculating other entitlements under the Modern Awards and NES and does not affect any other unpaid or paid leave entitlements (i.e. the employee is not required to first exhaust any other leave entitlements such as sick leave prior to taking unpaid pandemic leave).
The unpaid pandemic leave does not need to be accrued – it is available in full immediately to full-time, part-time and casual employees covered by the varied Modern Awards.
Further, employees who take unpaid pandemic leave and whose employers are eligible under the JobKeeper scheme, must still be paid their JobKeeper payment from their qualifying employer for the period of unpaid leave. In relation to the payment of the superannuation guarantee in such circumstances, the Australian Government Treasury department has advised that “where an employee is paid more than $1,500 per fortnight, the employer’s superannuation obligations will not change. Where an employee is having their wages topped up to $1,500 per fortnight by the JobKeeper Payment, it will be up to the employer if they want to pay superannuation on any additional wages paid by the JobKeeper Payment.”
The Schedule does not expressly permit an employer to direct an employee to take unpaid pandemic leave. However, keep in mind that employers who qualify for and participate in the JobKeeper scheme can, whilst the JobKeeper scheme is in place (i.e. until 28 September 2020) request an eligible employee to take paid annual leave (as long as the employee, in doing so, retains, a balance of at least 2 weeks accrued annual leave entitlement). Such a request cannot be unreasonably refused by the employee.
Annual leave at half pay
The Schedule also provides that employees and employers may come to an agreement that, instead of an employee taking paid annual leave on full pay, the employee may take twice as much annual leave at half their normal pay.
By way of example, the employer and employee may agree that the employee will take 4 weeks’ paid annual leave at half pay instead of 2 weeks annual leave on full pay. In such circumstances, the employee’s pay for 4 weeks’ leave will be the same as the pay the employee would have been entitled to for 2 weeks’ leave on full pay (where the 2 weeks’ full pay includes leave loading, as applicable). Two weeks of leave is then deducted from the employee’s annual leave accrual.
If such an agreement is reached, the employee on leave at half pay will accumulate annual leave, sick leave, and carer’s leave as if they were on leave at full pay.
Such an agreement must be recorded in writing and kept as an employee record. The period of half pay annual leave must commence before 30 June 2020.
The FWC has not ruled out implementing further changes to the Modern Awards.
If you have any questions about how these changes may impact you, please contact us here or give us a call on +61 (2) 9300 3100.