JobKeeper enabling directions – a focus on 'reasonableness'

In brief 2 min read

In a recent decision of the Fair Work Commission (the FWC), an employer has been chastised for unreasonably directing an employee to work only 60% of their pre-COVID hours.

Key takeaways

• A reduction in overtime hours is relevant when considering whether an employee can be usefully employed for their normal hours.
• Any direction to reduce hours must not be excessive and must be proportionate to any reasonably forecast decrease in work.

Background

Live Events Australia Pty Ltd directed an employee to decrease the number of hours worked each fortnight from 80 to 48 (the direction). The direction was made as a JobKeeper enabling direction under the JobKeeper provisions of the Fair Work Act 2009 (Cth) (the JobKeeper provisions). The JobKeeper provisions permit employers to decrease the number of hours worked by employees where certain factors exist (including that the employee cannot be usefully employed for their normal hours), and where it is not unreasonable.

The employee did not agree to the reduction in his hours, and challenged the direction on the basis that:

• he could be usefully employed on his normal days or hours; and
• the direction was unreasonable.

The decision: the employer 'overplayed its hand'

The FWC found that, while the employee's ordinary hours had not changed since the commencement of the COVID-19 pandemic (or after he was issued the direction), the regular overtime hours that he typically worked had decreased. Before COVID-19, the employee had worked 80 ordinary hours per fortnight, plus between 5 and 20 regular overtime hours. These hours together formed the 'normal hours' for the purpose of the JobKeeper Provisions. The decrease in regular overtime as a result of COVID-19 meant that the employee could not be usefully employed for his normal hours.

As to whether the direction was reasonable, while some decrease in hours would have been reasonable, the employer had 'overplayed its hand' in this case. This is because:

• the reduction in hours was disproportionate to the actual and reasonably forecast rostered hours of the employee and other employees in a similar role;
• most employees in similar roles were actually working 80 hours per fortnight; and
• Live Events had recently moderated the reduction it had imposed on other employees' hours so that they would work 80% of their ordinary hours. The direction would have resulted in this employee only working 60% of his ordinary hours.

The FWC substituted the direction with one that the employee's hours be reduced to 80% of his ordinary hours.