Court finds Qantas not required to pay sick leave

Posted by on May 20, 2020

The Federal Court has found that employees are not entitled to access paid personal leave or compassionate leave during a period of stand down. In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & Ors v Qantas Airways Limited, several unions brought a challenge on behalf of Qantas employees who had been on sick leave at the time Qantas decided to stand down over two thirds of its staff. These employees included a man battling cancer and another employee with heart failure who had accumulated significant sums of paid personal leave throughout their years of service.

Justice Flick initially considered the rationale behind the right to stand down employees under the Fair Work Act 2009. He noted that a key purpose of a stand down is to provide financial relief to an employer by removing the requirement to pay wages if there is no useful work for an employee to perform. As such, he considered that it is permissible to consider the “economic consequences” for an employer when considering whether an employee can be usefully employed. Additionally, a stand down intends to protect employees from termination of their employment where they cannot be usefully employed.

The relevant provisions of the Fair Work Act provide that an employee is not taken to be stood down during a period when they are “taking paid or unpaid leave that is authorised by the employer” or where they are “otherwise authorised to be absent from his or her employment”. The unions argued that an employee on personal leave was taking paid leave that was authorised by the employer, or in the alternative, that they were otherwise authorised to be absent from their employment, and therefore not to be taken as having been stood down by Qantas.

Justice Flick considered that the purpose of personal leave is a form of income protection, allowing an employee to take leave from performing the work they are required to perform when they are ill or injured. In the context of a stand down there is no work available to be performed by the employee, so there is no
need for personal leave to protect against that loss of income when an employee is unfit to perform that work. Justice Flick also noted that permitting an employer to stand down employees is generally intended to alleviate the financial necessity to continue to pay these employees, which would conflict with a requirement to provide paid personal leave to stood down employees. An employer may choose to authorise an employee’s personal leave while they have been stood down, but in Qantas’s case, they had withdrawn this authority after giving the stand down direction. As a result, the employees were not on paid or unpaid leave that was authorised by Qantas.

Additionally, Justice Flick held that an employee would be otherwise authorised to be absent from their employment in circumstances where provisions of the Fair Work Act themselves “authorise” or “entitle” the employee to be absent. This is because the words “otherwise authorised” do not refer to a choice that is open to an employer. An employee is otherwise authorised to be absent from work in circumstances such as where they are undertaking an eligible community service activity, jury service, and on public holidays. In these limited circumstances, an employee is not to be taken as having been stood down by their employer. But these circumstances do not include paid personal leave or compassionate leave.

The unions involved in this case have flagged that they intend to appeal this decision to the Full Federal Court, so expect debates around stand downs to continue. In the meantime, employers are not required to pay personal leave or compassionate leave to employees who have been stood down. 

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & Ors v Qantas Airways Limited [2020] FCA 656

Nicola Martin is a lawyer at Justitia. To view Nicola’s profile, click here.