Pitfalls of Flexible Working Arrangements

Public news

In the early times during the COVID-19 crisis, employers responded to the dramatic drop in business by either:

  • standing employees down pursuant to provisions under the Fair Work Act; or
  • reaching agreement with employees to access their paid leave entitlements (annual leave or long service leave), or to work reduced hours by agreement.

Under these arrangements:

  1. A stood down employee must be fully stood down (ie working no hours), and is not entitled to be paid (subject to JobKeeper provisions), but continues to accrue leave entitlements (and may seek to access such entitlements), and their continuity of service is unbroken.
  2. An agreement to take either annual leave or long service leave, provided it is a genuine agreement, is binding, and all leave entitlements may be used (ie there is no need to leave a reserve).
  3. An agreement to work reduced hours, provided it is a genuine agreement, is binding. An employee on reduced hours by agreement accrues leave entitlements based on the reduced hours, and may seek to top up hours with paid leave.

Very quickly, a number of Awards were varied to introduce a wide range of temporary measures to assist with flexible work arrangements during the pandemic. Due to difficulties in negotiation with the ACTU and relevant unions, the Vehicle Award was only varied on 11 May 2020, and introduced similar provisions to JobKeeper, to assist those businesses who do not qualify for JobKeeper.

The introduction of the JobKeeper scheme saw a raft of flexible work arrangements introduced also to assist employers, including:

  • Directions to work reduced hours (including down to zero).
  • Directions to work alternate duties.
  • Requests to work on different days/times, or at a different location.
  • Requests to take annual leave.

Under JobKeeper (and the similar provisions under the Vehicle Award variation):

  1. An employee working reduced hours continues to accrue leave entitlements at their normal hours, and their continuity of service is unbroken.
  2. An employee requested to take annual leave must be left with at least 2 weeks reserve, and may take leave at half pay.

The first issue we are seeking arise is employees refusing to attend work. Under either JobKeeper provisions or the Award variation, the employer may direct reduced hours, and alternate duties, and therefore a refusal to attend work and complete the directed work is a misconduct issue, as it is a refusal to obey a reasonable and lawful direction by the employer.

If the employee falls under neither JobKeeper provisions nor the Award, then they may refuse to work alternate duties (unless there is a contractual provision allowing for this), but cannot refuse to attend work to perform their normal duties if so directed.

It is important to bear in mind that the JobKeeper payment is a wage subsidy to assist employers to pay their employees. The employees are still obliged to work if work is available for them, and if they are so directed by the employer.

The second issue we are seeing is employees insisting on their annual leave being returned to them, if they have accessed it under either an agreement or under JobKeeper, on the basis that the employer should “just have paid them from JobKeeper”. Again, this is a misunderstanding of the purpose of JobKeeper.

If an employee has taken annual leave or long service leave by agreement, there is no requirement to return this, or to keep a 2 week reserve.

If an employee has been requested to take annual leave under either JobKeeper or the Award variation, the 2 week reserve must be kept, and long service leave may not be directed under these provisions.

You should consider the basis on which leave has been accessed, and take advice from the MTA Workplace Relations team if an employee makes a claim, or if any other issue arises, on (08) 8291 2000.