In April 2020, temporary amendments were introduced into the Fair Work Act 2009 (Cth) (FW Act) to support the JobKeeper scheme. The provisions permit eligible employers to give certain directions to eligible employees in relation to reducing hours or days of work and/or temporarily changing their usual duties, location of work or days and times of work.

In addition, the JobKeeper provisions of the FW Act also permit employers who qualify for the JobKeeper scheme to request that an eligible employee take paid annual leave. The request to take paid annual leave must not result in the employee having an annual leave balance of less than two weeks. The employee must consider the request and not unreasonably refuse.

The Fair Work Commission (FWC) has jurisdiction to hear certain disputes in relation to these JobKeeper amendments. Recently, in McCreedy v Village Roadshow Theme Parks Pty Ltd [2020] 2480, the FWC considered an employee’s refusal of their employer’s request to take annual leave.

The employer operated various theme parks on the Gold Coast and the employee worked  part-time, two days per week, in the Staff Services Department. Due to the impact of the COVID-19 pandemic, the employer was not able to operate and as a result, stood down a large part of its workforce, including the employee.

In April 2020, the employer issued the employee with an annual leave request letter in accordance with the recent amendments to the FW Act.

The employee refused the request and lodged a dispute with the FWC. For the employee, the request meant that she would be required to take one annual leave day per week and that a minimum of four days annual leave would be maintained. At the time of the request, the employee had 18.6 days of annual leave accrued and 17.3 days of long service leave based on her hours of work.

In support of her claim that her refusal was not unreasonable, the employee submitted that:
  • The employer was a large corporation with a solid financial position and should not be able to use the JobKeeper legislation to reduce its annual leave liabilities.
  • Senior management should bear the onus of reducing costs and the financial position of the employer was not her concern.
  • The employer’s request would impact long-serving employees with large leave balances as those employees would be left with the same leave balance as employees with less service.
  • She had a number of holidays planned and paid for in the next 12 months and beyond where she would use her annual leave.
  • She suffered from a medical condition.
  • There was an inherent unfairness as casual employees on JobKeeper who earned less would receive more wages, and employees on JobSeeker were not requested to take annual leave.
The employer submitted that it did take into account the medical conditions of employees when considering their responses to the requests to take annual leave. In this instance, the employee’s medical condition did not require special treatment.

The employer also submitted that its policy was that leave must be approved before it is guaranteed and employees should not make bookings or pre-pay for holidays before their leave requests were approved. It was also the employer’s policy that leave could only be requested within 12 months. In this case, the employee’s leave for her holidays had not been approved or were in more than 12 months’ time.

Commissioner Hunt found that the employee had unreasonably refused the employer’s request. She noted that the relevant test was whether the employee unreasonably refused the request rather than if the employer acted unreasonably. Commissioner Hunt held that the employee’s refusal had no justification and was “excessive, and disappointingly vitriolic”. It was noted that the employee “made incredibly unsympathetic, and in my view, belligerent and unwarranted attacks on [the employer], despite the JobKeeper provisions being available to all eligible employers, small or large.”

While Commissioner Hunt was sympathetic that the employee would take over two years to accrue her current balance, she noted that to take a week off work, the employee would utilise less leave than a full-time employee. In relation to the employee’s planned holidays, Commissioner Hunt held it was merely the employee’s preference to use annual leave for her future holidays but she still had access to long service leave or leave in advance. It was also noted that for some of the holidays, the employee had paid for them before her leave was guaranteed.

In addition, Commissioner Hunt held that the employer’s request to reduce leave liabilities was reasonable given that it had been unable to operate and was unlikely to operate for the foreseeable future.
Commissioner Hunt ordered for the employee not to continue to refuse the employer’s request, with the order continuing until 27 September 2020 – when the JobKeeper amendments are legislated to end.

Lessons for employers

The amendments to the FW Act permit an employer to request that employees use their annual leave balances. This can come with some resistance from employees, particularly those who have a significant amount of leave accrued.

The FW Act requires that employees not “unreasonably refuse the request” provided that the request complies with the other legislative requirements. As this case demonstrates, all the circumstances should be considered. An employee’s preference not to use their annual leave may not be sufficient to refuse a request to take their paid annual leave.

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