On 24 September 2020 the Federal Court considered in Qantas Airways Limited v Flight Attendants’ Association of Australia (The JobKeeper Case) [2020] FCA 1365 the correct construction and application of “the amounts payable to the employee in relation to the performance of work during the fortnight” in relation to the payments able to be covered by JobKeeper.
Although this case specifically addressed an underpayment by Qantas only, it does have potential application for all employers and employees participating in the JobKeeper Scheme.
The South Australian Business Chamber with the Australian Chamber of Commerce and Industry and other Chambers and Industry Associations are examining the implications, impact, and possible remedies to this decision. Businesses are advised to seek advice by calling our Business Advice Hotline (for the South Australian Business Chamber Members) or IR Advice Line (for Non-Members) on (08) 8300 0000 so that we can provide you with advice specific to your business circumstances.
Essentially, the outcome of the determination is that, if in a JobKeeper fortnight an employer pays an employee for work the employee performed in a different JobKeeper fortnight, the employer must pay that money in addition to the JobKeeper payment.
The Federal Court found that the JobKeeper payments cannot include payments for annual leave, as those are not amounts for “the performance of work”. This is despite a note on the legislation specifically referring to leave payments. Accordingly, where an employee is on annual leave for the duration of a JobKeeper fortnight, it appears the employee will be entitled to receive his or her annual leave pay in addition to the full amount of the JobKeeper payment.
This interpretation also effectively denies an employer any benefit from the JobKeeper scheme where the employer pays its employees entirely in arrears for work performed by the employees outside the relevant JobKeeper fortnight.
Justice Flick of the Federal Court stated that:
“If the consequence of the interpretation now given to s 789GDA(2)(b) is that idiosyncrasies arise in respect to the quantification of amounts that an employee is to receive – including the prospect that employees may benefit from a “windfall” – so be it. It remains a matter for the Legislature to “tweak” or adjust the Scheme if it sees fit.
Access more information on COVID-19 on the South Australian Business Chamber’s dedicated resource page here.
