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COVID-19: “Unreasonable” Refusal of a Jobkeeper Request
Kate Staude, Senior Associate
In its first consideration of Jobkeeper-related employment disputation, the Fair Work Commission has recently found that an employee was not within her rights to refuse a request from her employer that she take accrued annual leave.
A part-time employee who had accumulated excessive leave was asked by her employer to take paid annual leave. Leonie McCreedy has been employed by Village Roadshow Theme Parks Pty Ltd (“VRTP”) for 22 years. She typically worked two days a week earning about $375 per week. The impact of COVID-19 restrictions had meant that VRTP could not operate its theme parks and so most of the staff, including Ms McCreedy, were stood down in late March 2020. VRTP was an eligible employer under the Jobkeeper scheme and Ms McCreedy, relevantly, was receiving Jobkeeper payments of $750 per week.
Request to take Annual Leave
VRTP decided to take some cost-cutting measures during the crisis, including reducing salaries of the senior leadership team and requesting employees take annual leave. Section 789GJ of the Fair Work Act 2009 (Cth) provides that under the Jobkeeper scheme, an employee must consider and must not unreasonably refuse an employer’s request for the employee to take paid annual leave, provided it would not reduce the employee’s accrued annual leave balance to less than two weeks (for full-time employees). The right to request an employee to take paid annual leave is an initiative introduced as part of the Jobkeeper legislation which is designed to give eligible employers some flexibility in this current crisis.
Ms McCreedy had a balance of almost ten weeks’ accrued leave. VRTP requested Ms McCreedy to take one day’s annual leave a week until her leave balance was four days or 27 September 2020 (being the date when Jobkeeper payments cease) was reached. Ms McCreedy refused her employer’s request to take paid annual leave over the proposed 16 week period. Her refusal was on the grounds that:
- the legislation was not intended to benefit large employers who could off-set annual leave entitlements using Jobkeeper payments;
- VRTP’s leave policy unfairly targeted those with long service who had accrued leave;
- she had planned holidays including a trip to Europe in 2021; and
- she suffered from a medical condition and she alleged that the request had caused her “a great deal of angst.”
The employee referred the dispute to the Fair Work Commission and the matter was heard by Commissioner Jennifer Hunt. Commissioner Hunt made an order that the employee could not continue to refuse her employer’s request. She found that there was nothing in the Explanatory Memorandum to suggest that the size of the employer would be a relevant factor when determining whether the employee’s refusal was reasonable. The employee anticipated requiring only four days for her planned holiday for September/October 2020 an, as such, would not be prejudiced.
The decision confirms that employees who are contemplating refusal of a Jobkeeper-related request must be able to justify such refusal. Employers are well-advised, notwithstanding the decision, to collaborate and consult with their staff on these matters.