2020 employment law highlights

Reviewing a year like no other 5 min read

2020 was an extraordinary year in many regards and the developments in employment and industrial relations law were no exception.

This article highlights the three particularly significant cases that have informed some of the major industrial law reforms proposed by the Government in December 2020 (see our Insight on the bill introduced).

How does it affect you?

Key highlights from this year's big workplace decisions are:

• Characterisation of casual employees: employees engaged as casual may in fact be permanent employees, in which case they may be entitled to paid leave, notice of termination, redundancy pay, public holidays and, in some circumstances, access to the unfair dismissal regime.¹ Characterisation is not dependent on the terms of the employment contract and all factors relevant to determining the nature of the employment relationship must be taken into account.
• Paid personal/carer's leave accrual: the High Court of Australia (High Court) has confirmed that entitlement to 10 days' paid personal/carer's leave under the Fair Work Act 2009 (Cth) (FW Act) accrues in hours rather than days, based on employees' ordinary hours of work.²
• Stand downs: the Federal Court of Australia (Federal Court) recently held that government restrictions on travel and quarantine measures stemming from the COVID-19 pandemic caused a stoppage of work for the purpose of stand downs initiated by Qantas and Jetstar under their enterprise agreements.³ This suggests that while employers cannot stand down employees simply due to a downturn in trade, standing down employees as part of a strategy to ensure the economic survival of a business may be justified in some circumstances.

Decisions

Rossato and casual employees

Characterisation of casual employees remained a hot topic in 2020, with the Full Federal Court (Full Court) handing down a widely anticipated decision determining that Mr Rossato was a permanent employee of labour hire firm WorkPac, despite being engaged as a casual employee in six consecutive contracts. As a permanent employee, he was entitled to recover his accrued, untaken leave entitlements.

The Full Court reinforced the key factors used to assess whether an employee is engaged as a casual or permanent:

• Mr Rossato was not a casual employee because his employment was for an indefinite duration and was stable, regular and predictable such that a 'firm advance commitment' was evident in each consecutive employment contract over the almost four-year period in which he was employed by WorkPac;
• the employment relationship must be assessed as a whole: while the employment contract described engagement as 'casual' several of its the terms were inconsistent with casual employment, including the ability to stand down Mr Rossato; and
• other relevant factors include whether the employment contract provides for the parties to offer work, or to elect to work, on a particular day.

Critically, the Full Court also held that the payment of casual loading to Mr Rossato was ineffective in setting off his entitlements to paid leave.

In November, the High Court granted leave to Workpac to challenge the Full Court's ruling, with the appeal expected to be heard in 2021.

To read more about the Rossato decision and the potential impact on your business, see our detailed Insight.  

The Federal Government recently announced that its proposed industrial relations reforms will seek to address the uncertainty regarding casual engagement and risks of 'double dipping' of entitlements. The IR omnibus Bill will include a definition of casual work that, if passed, will be enshrined in the Fair Work Act and may go some way to alleviating the confusion in this area (see our Insight for more on the proposed omnibus Bill).

Mondelez and paid personal/carer's leave

In a decision welcomed by employers, the High Court has clarified the approach for calculating the accrual of paid personal/carer's leave under the FW Act, holding that leave accrues in hours (not days) based on employees' ordinary hours of work.

In summary, this means:

• employees who work the same number of ordinary hours over a two-week period progressively accrue a number of hours of paid personal/carer's leave each year that is equivalent to those ordinary hours;
• for employees who do not work the same number of ordinary hours in each two-week period, the entitlement should be calculated by dividing the ordinary hours they are rostered to work for the year by 26; and
• an employee who takes paid personal/carer's leave should be paid for the ordinary hours they would have worked on that day and their accrual should be reduced by those same number of hours.

The High Court rejected the approach taken by the Full Court that, regardless of the employee's pattern of work or distribution of hours, they are entitled to be absent on paid personal/carer's leave for 10 days per year.

See our Insight for more about how to calculate leave entitlements following the Mondelez decision and its potential impact on your business.

Qantas and stand downs

Following a landmark move by Qantas and Jetstar in March 2020 to stand down approximately two thirds of their staff, the Australian Licensed Aircraft Engineers Association (ALAEA) challenged the legality of the stand down in the Fair Work Commission (FWC), arguing that the stand downs of its aircraft engineer members were unlawful under the terms of the respective Qantas and Jetstar enterprise agreements because the aircraft engineers could still be usefully employed and there had been no real stoppage of work.

Qantas and Jetstar successfully applied to the Federal Court for an injunction restraining the FWC from arbitrating the dispute.⁴ After considering the dispute resolution provisions of the respective enterprise agreements, the Federal Court subsequently referred the question of whether there was useful work to be performed by the aircraft engineers back to the FWC.⁵

In considering the question of whether there had been a stoppage of work,⁶ the Federal Court held that the 'cause' of a stoppage of work is not limited to the immediate cause, but the sequence of events which ultimately led to the stoppage of work. Taking into account the sequence of events and financial implications arising from the COVID-19 pandemic, including government-issued travel warnings, border controls and strict self-isolation and quarantine measures for travellers, the Federal Court concluded that the stoppage of work was not a cause for which Qantas could reasonably be 'held responsible' or a cause which Jetstar could 'reasonably prevent', as required to permit the stand downs under the respective enterprise agreements.

In a separate application, the Federal Court confirmed that Qantas was not required to continue to pay employees personal/carer's leave and compassionate leave while stood down.⁷

The FWC will now determine the legality of the stand downs by considering whether the stood-down employees could have been usefully employed.

To read more about the Qantas stand down cases, please click here, here and here to read our detailed Insights.