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When can employees refuse an employer’s request to take annual leave under the new JobKeeper provisions?

20 May 2020

#Workplace Relations & Safety, #COVID-19

Louise Rumble

Published by Louise Rumble, Clare Giugni

When can employees refuse an employer’s request to take annual leave under the new JobKeeper provisions?

In the first JobKeeper decision handed down by the Fair Work Commission (Commission), Commissioner Hunt has provided some greatly anticipated clarity on recent JobKeeper-related amendments to the Fair Work Act 2009 (Cth) (Act) enacted in response to the COVID-19 pandemic.

The case centered on a request by theme park operator, Village Roadshow Theme Parks Pty Ltd (VRTP), that its employees take annual leave at a rate of half their ordinary hours per week while receiving the JobKeeper payment.

VRTP made the request pursuant to recent amendments to the Act, which require employees to consider, and not unreasonably refuse, their employer’s request to take annual leave provided the employee will be receiving the JobKeeper payment from the employer and provided the requested leave period will not deplete the employee’s leave beyond a minimum two week balance.

The Applicant, Ms McCreedy did not agree to take annual leave as requested by VRTP and filed a dispute with the Commission seeking a declaration that her refusal of VRTP’s request was not unreasonable. The Commission has jurisdiction to make any order the Commission considers appropriate in order to resolve a dispute arising under Part 6.4C of the Act, being the JobKeeper-related legislative changes.

The Commission was required to consider whether Ms McCreedy had unreasonably refused VRTP’s request to take one day of annual leave per week.

Was Ms McCreedy’s refusal to take annual leave reasonable?

Ms McCreedy cited several factors to justify her refusal of VRTP’s request. In particular, she objected to the exhaustion of her leave. She provided evidence of various planned holidays over the forthcoming 2020-2021 period, some of which had been partly paid in advance. Ms McCreedy also produced evidence of a medical condition which, she argued, required her to have a paid leave balance of more than the minimum two weeks.

Another significant aspect of Ms McCreedy’s submissions was the ‘inherent unfairness’ of VRTP, a large employer in a strong financial position, ‘lining their own pockets’ by using the JobKeeper payments to offset employees’ accrued annual leave.

Commissioner Hunt, in determining that Ms McCreedy’s refusal of VRTP’s request was unreasonable, observed that the JobKeeper provisions of the Act applied equally to large and small employers. The Commission clarified that the issue was not whether VRTP had acted reasonably when requesting Ms McCreedy to take annual leave, but whether Ms McCreedy’s refusal of that request was unreasonable.

Commissioner Hunt found that Ms McCreedy’s reasons for refusing VRTP’s request ‘lacked justification in fact or circumstance’ and considered that Ms McCreedy had planned upcoming trips without first obtaining approval from VRTP. The Commission noted that Ms McCreedy had paid some travel expenses despite the VRTP leave policy advising that employees wait for formal leave approval before booking trips as such approval was not guaranteed.

In addition, the Commission determined that Ms McCreedy would still have access to paid leave for each of her planned trips, given VRTP’s policy of allowing employees to take up to ten days of annual leave in advance and the nine weeks of long service leave Ms McCreedy had already accrued.

Ms McCreedy’s medical condition was not considered to be sufficiently serious to warrant a balance of annual leave of more than the minimum two weeks.

Commissioner Hunt noted for clarity that the fact Ms McCreedy receives double her ordinary salary under the JobKeeper payment scheme was not a relevant consideration for the purposes of this decision.

Ultimately, Commissioner Hunt said she appreciated Ms McCreedy’s disappointment with the depletion of her annual leave but concluded that Ms McCreedy’s ‘very strong preference’ that her annual leave not be depleted to the minimum two week period was not sufficient to justify her refusal of VRTP’s request.

The Commission’s decision

Having found that Ms McCreedy’s refusal of VRTP’s request was unreasonable, the Commission ordered Ms McCreedy not to continue to refuse the request made by VRTP.

However, the Commission noted that VRTP’s request had damaged their relationship with some employees and that it was open for VRTP to consider the optics of their request given the ‘stinging criticism’ from some employees.

When would an employee’s refusal to take annual leave be reasonable?

Commissioner Hunt did not elaborate on the circumstances in which an employee could reasonably refuse an employer’s request to take annual leave.

However, in considering Ms McCreedy’s medical condition, the Commissioner commented that, if an employee had a medical condition requiring future time off for surgery or other treatment which was likely to exhaust their paid personal leave, and refused a request to take annual leave, such circumstances would be relevant in determining whether the employee’s refusal was unreasonable.

In addition, the Commissioner noted that, had Ms McCreedy received formal approval from VRTP for her planned annual leave, that approved leave would have been guaranteed.

Next steps

If Ms McCreedy does not accept the Commission’s decision, she may seek permission to appeal to the Full Bench of the Commission within 21 days from the date of the decision.

Click here to read more on the decision.

Author: Louise Rumble & Clare Giugni

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.

Louise Rumble

Published by Louise Rumble, Clare Giugni

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