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02 April 2020

Modern Awards to be varied in response to the COVID-19 crisis

Changes to Modern Awards in response to the challenges being experienced by employers and employees as a result of the COVID-19 pandemic.
  1. On 1 April 2020, the Fair Work Commission, in response to the current COVID-19 crisis, proposed the introduction of a new ‘Schedule X’ into 103 modern awards. The new schedule would provide employees with an entitlement to two weeks’ unpaid ‘pandemic leave’ and would provide the flexibility for annual leave to be agreed to be taken at half pay over twice the time.
  2. Under the proposed provision for unpaid ‘pandemic leave’, an employee would be able to elect to take up to two weeks’ unpaid leave if they were required to self-isolate or were otherwise prevented from working by measures taken by government or medical authorities in response to the COVID-19 pandemic.
  3. The leave would be available in full immediately to full-time, part-time and casual employees (not pro-rated), with employees not required to exhaust their paid leave entitlements before accessing the unpaid pandemic leave provisions.
  4. Leave taken under this provision would not affect any other paid or unpaid leave entitlement the employee may have and would count as service for the purposes of entitlements under the relevant award and the National Employment Standards.
  5. The new schedule would also provide a model term, allowing an employee to agree with their employer to take up to twice as much annual leave at half the rate of pay.
  6. If an employee agreed to take one week of paid leave over two weeks, the employee’s full pay for the two weeks’ leave would be same as the pay the employee would have been entitled to for one week of paid leave on full pay (including any leave loading) and one week of leave would be deducted from the employee’s annual leave accrual.
  7. While the Commission considered whether to take broader measures, such as introducing the capacity for employers to direct employees to take annual leave and measures to facilitate reductions in the working hours of full-time and part-time employees, it stated it has adopted a more limited approach at this stage to provide a quick response to the current crisis.
  8. At this point in time, the new schedule is to be introduced in phases. The construction, maritime, and mining and resource sector awards are the only awards proposed to be excluded from phase 1 – on the basis that the businesses within those sectors have not been as adversely impacted yet and do not have a high level of award-reliance.
  9. The Commission is currently taking submissions on its provisional views. If any submissions are received, a hearing will be set down for 2.00 pm Wednesday 8 April 2020.

As always, the workplace relations team here at Cooper Grace Ward will keep you updated on important developments affecting employers.

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This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please let us know.

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