Stood down employees not entitled to personal leave; Federal Court to determine Qantas COVID-19 stand down legality

The Federal Court is poised to determine whether Qantas’ stand down of approximately 66% of its Licensed Aircraft Maintenance Engineers (LAMEs) was legal. In the meantime, the Court has determined that stood down employees are not entitled to personal leave. A summary of the decisions is provided below.

Federal Court set to hear stand down dispute

The Federal Court is set to hear and determine the dispute over whether or not Qantas’ decision to stand down its LAMEs was legal. In deciding on Tuesday to take over the matter from the Fair Work Commission, the Federal Court’s Justice Katzmann recognised that numerous businesses in Australia have stood down employees in the wake of the current pandemic and the Government’s response to it, stating: ‘It is in the interests of justice that questions of such general and widespread application and importance be determined by a superior court and not left to private arbitration’.

The Court will first have to decide whether or not the Australian Licensed Aircraft Engineers Association (ALAEA) jumped the gun initiating proceedings, with Qantas arguing that the ALAEA has not followed the dispute settling procedure as set out in the enterprise agreements. Subject to the determination of jurisdiction, the Court will consider the ALAEA’s contention that Qantas’ decision to stand down LAMEs was unlawful on the basis that Qantas has not demonstrated:

• the LAMEs cannot be usefully employed
• there was a stoppage of work
• any stoppage of work was caused by the global pandemic or the Government’s response to it.

With one successful argument fatal to Qantas’ stand downs, and large implications for both business and industry, employers should ‘watch this space’.

Stood down employees not entitled to personal leave

The Federal Court has dealt a blow to stood down employees, determining that they are not entitled to access their personal, carer’s or compassionate leave while stood down.

In a decision favouring employers (in this case Qantas) Justice Flick determined that the object and purpose of both the stand down and leave provisions under the Fair Work Act supported the view that employees who are stood down are not able to use their accrued personal, carer’s or compassionate leave. Citing the pending High Court case Mondelez, the Court opined that personal leave was a form of ‘income protection’, relieving an employee from doing the work otherwise contractually required to be undertaken. Taking the view of personal leave as ‘income protection’ presupposes that an employee is in receipt of income, leading the Court to agree with Qantas’ submission that ‘”income” is not being protected if there is no available or required work from which to derive income in the first place’.

The Court also rejected the ALAEA’s contention that personal leave was an authorised absence under section 525(b) of the Act, describing the provision as relating to those circumstances in which provisions of the Act authorise or entitle an employee to be absent, for example, eligible community service activity, jury service and public holidays.