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Can employees use paid sick leave entitlements while stood down for COVID-19?

3rd April, 2020

Anthony Forsyth, RMIT University and Labour Law Down Under Blog

Last weekend, the ABC reported that Qantas is refusing to allow its 20,000 staff stood down due to the coronavirus crisis to use their entitlements to paid sick leave. This was stated to apply even to employees who were already on paid sick leave prior to the imposition of the stand downs.

ABC News indicated it was ‘aware of Qantas employees who fear they may have been exposed to coronavirus and will be left without paid sick leave if they get sick’.

Sure enough, there has been a breakout of coronavirus cases among Qantas baggage handlers at Adelaide airport in the last few days. 

Qantas’ position is that employees who have been stood down cannot take sick leave from work in circumstances where there is no work. However the airline says employees can access their annual leave and have access to future annual and long service leave entitlements.

This would have been the only way employees could continue to be paid during stand downs, prior to this week’s announcement of the Federal Government’s Jobkeeper Payment scheme. 

The Qantas Engineers Alliance Unions (AMWU, ETU and AWU)  filed Federal Court proceedings on Tuesday seeking to challenge the airline’s decision on sick leave during stand downs. The AWU’s National Secretary Daniel Walton argued that workers ‘cleaning potentially contaminated planes to make them safe’ for future flights ‘could contract COVID-19 before being stood down, and yet Qantas is refusing to pay them sick leave’:

This is an issue that affects many employees and employers at present, not just Qantas.

So what is the legal position?

Stand down rules

The stand down provisions of the Fair Work Act state that, where an employee is stood down because of a stoppage of work beyond the employer’s control, ‘the employer is not required to make payments to the employee for that period’ (section 524(3)).

An employee is not taken to be stood down if the employee ‘is taking paid or unpaid leave that is authorised by the employer’ or is on another authorised absence from employment (section 525). A note to that provision clarifies that an employee can take, for example, annual leave during all or part of a period when they would otherwise be stood down.

Sick leave entitlements

The right to take sick leave forms part of the National Employment Standards, specifically ‘paid personal/carer’s leave’, in the Fair Work Act. This entitlement accrues at the rate of 10 days for each year of an employee’s service with their employer, although not for casual employees (sections 95-96).

An employee may take paid personal leave (i.e. sick leave) when ‘the employee is not fit for work because of personal illness, or personal injury, affecting the employee’ (section 97(a)). Further, the notice and evidence requirements in section 107 must be complied with, such as provision of a medical certificate.

Conclusion

The interaction between the stand down and sick leave provisions of the Fair Work Act is not clear. However for the following reasons, I think the better view is that an employee is able to access paid personal leave while stood down:

  1. Qantas’ argument involves a narrow approach to interpreting section 97(a) – an employee cannot be unfit ‘for work’, when there is no ‘work’ happening as a result of stand down. There is no work to be absent from.
  2. This relies, by implication, on considering the purpose for which paid personal leave is provided under the Fair Work Act: it is intended for situations where an employee is unable to attend work due to illness or injury.
  3. It is clear that annual leave is available to employees while stood down. Yet when we consider the purpose of annual leave, it is intended to provide employees with rest and recreation. That purpose is hardly being fulfilled for the many hundreds of thousands of Australian employees currently stood down and subject to employer-mandated use of their annual leave accruals.
  4. The note to section 525 mentions annual leave as an example of leave entitlements that employees may use while stood down, leaving open the possibility that other forms of leave including paid personal leave are available.
  5. Annual leave and personal leave continue to accrue during stand downs (because they accrue in respect of ‘each year of service’ for an employee: sections 87(1) and 96(1); and stand down is considered ‘service’: sections 22(1)-(2)). Paid personal leave accrues progressively during a year of service according to the employee’s ‘ordinary hours of work’ (section 96(2)). If the notion of ‘ordinary hours of work’ is still operable for these purposes during a stand down, then why not the notion of ‘work’ for purposes of the right to take personal leave under section 97(a)?
  6. There is some old case law supporting the view that sick leave is available during a stand down, although these authorities are based on different statutory and award provisions (see e.g. Re Rubber Workers Award 1947 (1949) 65 CAR 84; Vehicle Builders Employees’ Federation (Aust) v British Motors Corporation (Aust) Pty Ltd (1966) 8 FLR 20; Re General Motors-Holden’s Pty Ltd (Part 1) General Award 1980 AILR ¶195).

Qantas is adopting an opportunistically technical approach to this issue, with a particularly harsh impact on those already on long-term sick leave prior to the stand downs taking effect.

Essentially the airline is saying that a perversion of annual leave entitlements is tolerable (when it’s in the interests of business), but we simply won’t allow any use of sick leave that in our view doesn’t meet the strict requirements of the Fair Work Act (which may not be correct).

The Federal Court’s ruling on this issue is therefore going to be critical for many businesses and workers. In the meantime, there is nothing to stop an employer granting employees access to paid sick leave while stood down if there is a legitimate medical basis for the employee to take such leave.

Thanks to Peter Punch of Carroll & O’Dea Lawyers for a helpful discussion on this issue and sending me a number of case law resources.

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