Charles v Airlie Beach Plumbing & Gasfitting Pty Ltd

[2020] FWC 6005

[2020] FWC 6005

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.524

Charles
v
Airlie Beach Plumbing & Gasfitting Pty Ltd
(C2020/4306)

DEPUTY PRESIDENT LAKE BRISBANE, 9 NOVEMBER 2020

Application to deal with a dispute involving stand down – s 524(1)(c) - stand down in relation to a stoppage of work – stand down relating COVID-19 – whether employees could have been usefully employed - Fair Work Act 2009 ss 524,526 – amendment of application under s 586 from s 739 to s 526 – application properly constitutes a stand down despite.

[1] This decision is in relation to an application by Ms Charles (the Applicant) pursuant to s 739 of the Fair Work Act 2009 (the Act). The Applicant contends Airlie Beach Plumbing and Gasfitting (the Respondent) stood her down in contravention of s 524 of the Act. The question of whether the stand down was in accordance with the Act turns on whether there was a genuine stoppage of work.

[2] Initially, a conference was convened. At this conference, the parties were unable to resolve the matter by agreement, so directions were sent requiring submissions and any documentation relevant to their claim. The parties have consented to a Decision being handed down on the papers.

[3] The application was brought under s 739, as an application to deal with a dispute, however the entirety of the Form 10 addresses the question of whether the Applicant was stood down. It is the only question posed in the application and it is clear that the Applicant only seeks a resolution as to whether the stand down was with accordance with the Act.

[4] In Peter Ioannou v Northern Belting Services Pty Ltd, in relation to an amendment of an application under s.365 to one under s.394, it was stated that: 1 (emphasis added)

[17]In our view, the power in s.586 of the Act cannot be used to allow an amendment to an application that fundamentally changes the kind of application that was originally made. The amendment sought by the applicant requires a fundamental change to the kind of application originally made, by transforming an unfair dismissal application into an application under s.365, and might allow this to be done without the applicant meeting the procedural and other requirements set out in the Act for making of a general protections application.

[5] The application was clearly one that solely considered the question of whether the stand down was one compliant with the Act. This question is determined by an application of the provisions under ss 524-526 of the Act. Such an amendment does not fundamentally change the kind of application; at most, it corrects an unrepresented Applicant’s error in picking the wrong form.

[6] The application is amended under s 586 to be one made under s 526 of the Act. This discretionary power is exercised having considered that, unlike above, there are no procedural bars that would stop the Applicant simply refiling their application under the correct section. In the interest of efficiency, the application should be amended.

Background

[7] The Respondent operates a small business with approximately 7 staff to provide plumbing and gas fitting services to the predominantly tourism-centric industry which is located in and around this region. 3 of the staff, including the Applicant, perform an administrative function in ensuring these services can be provided. The impact of the COVID-19 pandemic has had a significant impact on the tourism industry in this and most travel destinations globally. Given the Respondent’s client base and location, they have also been significantly impacted. With international travel effectively closed and interstate travel facing severe restrictions, the Respondent experienced a 61.2% downturn in the month of April, as compared to the same period in the previous year.

[8] The Respondent initially implemented what he designated as a job-sharing arrangement amongst the three administrative staff with one member (the Applicant) taking annual leave while the other two staff continued working. At the conclusion of the Applicant’s annual leave, without enough work to return the Applicant to her role and without access to JobKeeper due to her residential status, the Respondent elected to stand the Applicant down.

[9] The Respondent considered due to the ongoing nature of the pandemic that he may have to make the Applicant’s position redundant. However, he had heard that the Applicant, who was pregnant, would probably want to stay at home for the period following the birth of her child. Given the departure of one plumber from the business and the termination of another, it was clear that the proprietor would have to go back on the tools and therefore, not be able to share some of the office work. He decided to hire a trainee for a part time basis to handle some basic administration and phone calls as the business still had some work coming through.

[10] The Respondent wrote to the Applicant a consultation letter, advising her that he was considering making her role redundant. The Applicant rejected the propositions that either she wanted to stay at home or further, that her role was redundant. The Respondent proposed that the Applicant fulfil the role part time, rather than engage a junior.

[11] There ensued various pieces of communication from both parties over whether the stand down was appropriate and allowable under the Act. The Applicant asserted that the stand down was illegal and that she could not be forced to take annual leave in the circumstances.

[12] The parties could not resolve the issues and the Applicant lodged this application.

[13] The Applicant contends that the stand down was in breach of s 524 of the Act and further that she has not resigned or left the employment of the Respondent. The Applicant purports that her role still exists, and that the notion of her role being made redundant less than 48 hours after notifying the Respondent that she was pregnant is in breach of legislation. The Applicant’s clear impression was that the Respondent offered her the part time role to mitigate a possible claim for unfair dismissal. The Applicant did not confirm interest in the casual administration role on the basis that the stand matter should be resolved.

[14] The Respondent asserts that the Applicant’s employment ended when she refused to accept or reject the casual role.

The Legislation

[15] Part 3-5 of the Act relates to stand down – the relevant parts are extracted below:

526 FWC may deal with a dispute about the operation of this Part

(1) The FWC may deal with a dispute about the operation of this Part.

(2) The FWC may deal with the dispute by arbitration.

(3) The FWC may deal with the dispute only on application by any of the following:

(a) an employee who has been, or is going to be, stood down under subsection 524(1) (or purportedly under subsection 524(1));

…

(4) In dealing with the dispute, the FWC must take into account fairness between the parties concerned.

524 Employer may stand down employees in certain circumstances

(1) An employer may, under this subsection, stand down an employee during a period in which the employee cannot usefully be employed because of one of the following circumstances:

(a) industrial action (other than industrial action organised or engaged in by the employer);

(b) a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown;

(c) a stoppage of work for any cause for which the employer cannot reasonably be held responsible.

[16] There are three primary criteria which must be satisfied for a stand down to be lawful under s 524(1). First, the employee must be stood down during a time in which they cannot be usefully employed. Second, one of the three sub-criteria must be present. In the present case, s 524(1)(c) has been argued: a stoppage of work for which the employer cannot be held responsible. The third criteria dictates that the employee cannot be usefully employed because of the stoppage, as articulated by Gostenik DP in CEPU v FMP Group:  2

Indeed the structure and language of s.524(1) shows that there needs to be a temporal connection between one of the circumstances arising and the standing down of an employee because the employee cannot usefully be employed. The words “because of” in s.524(1) are used to indicate a causal link between the occurrence of a circumstance and the absence of useful employment.

A Stoppage of Work

[17] The concept of what constitutes a ‘stoppage of work’ has not been the subject of significant judicial commentary. In City of Wanneroo v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, Commissioner Williams applied the dictionary definition, stating: 3

The Macquarie Dictionary Online 2008 relevantly defines “stoppage” as:

1.the act of stopping; cessation of activity, etc…

4.a cessation of work as a protest; strike: a twenty-four hour stoppage.

[18] The Respondent has clearly had his business severely impacted by the pandemic, however, this is not conclusive of whether there has been a stoppage of work for which the Respondent has not been responsible. The COVID-19 pandemic currently being experienced is within the scope of an event that can cause a stoppage that the Respondent could have no control over.  4 To include an event such as COVID-19 within the ambit of the section reflects the broad approach to interpretation adopted in Coal & Allied Mining Services Pty Ltd v MacPherson:5

[15] Properly understood, a stand down, in that context, encompasses a large range of situations where, for various reasons, an employer is unable to provide useful work for its employees, for a particular period of time, for circumstances beyond its control. The employer may be temporarily deprived of electricity to run its operation. It may not have sufficient component supplies to manufacture its goods, due to industrial disputation by the employees of its suppliers. The employer’s factory may have been flooded. Numerous examples readily come to mind…

[19] While the events that could cause a stoppage have not been prescribed to a finite list, the requirement of a genuine stoppage has been interpreted strictly. In Bristow Helicopters, Commissioner Cambridge stated: 6

[62]… The circumstances contemplated by subsection 524 (1) (c) of the Act would require identification of some event which involved work being consciously halted for some reason and ordinarily for some identified period of time. A reduction in the available work for the EC 225 helicopters, for whatever reasons, does not represent a stoppage of work in satisfaction of the terms of subsection 524 (1) (c) of the Act.

[20] On appeal, the Full Bench agreed, stating: 7

[45] …It cannot be said on the evidence that there was a stoppage of work in circumstances where:

(a) There remained search and rescue work to be carried out with EC225 aircraft;

(b) There remained work with the EC225 notified by the Appellant after 19 May 2016 until 2 June 2016;

(c) CASA cleared the EC225 for search and rescue and ground runs from 16 June 2016; and

(d) There remained the decision and ability of the Appellant to retrain, and engage on training, its workforce.

[46] As such, we are not satisfied that the Commissioner erred in construing section 524(1)(c) of the Act.

[21] As held in Marson: 8

A mere reduction in available work can not constitute a stoppage – this would go against the ordinary definition of a ‘stoppage’, as is required by statutory interpretation. 9 Such an interpretation would develop a perverse outcome where s 524(1)(c) could be applied so liberally as to deprive employees their fundamental entitlement to work under an employment relationship.10 In Bristow Helicopters it is clear that the employer still had trade in which it could engage and the examples set down by the Full Bench indicate that there was sufficient useful work that could be undertaken.

Consideration

[22] I find that there was no genuine stoppage of work. The Respondent experienced a severe downturn in its business and made a number of adjustments to continue trading. They were successful in applying for JobKeeper and two of the Administrators were supported through this program. Unfortunately, the Applicant was prevented from participation due to her residential status.

[23] The Respondent seemed to operate from a false set of assumptions. He may have been acting from a sense of duty to try and prolong the Applicant’s employment through requiring her to take leave, and then standing her down, hopeful that the pandemic crisis would be short lived. The evidence provided shows that the decision to stand down was not one made without due consideration and I conclude that the Respondent acted upon proper principles and in good faith.

[24] While I am sympathetic to the Respondent’s continued struggle due to the current climate, this does not immediately vest an employer with the right to simply stand down their employees. In the face of economic duress, alternative avenues exist, such as making an employee redundant or reducing hours to meet the level of business need.

[25] I find that the stand down was not compliant with s 524 of the Act.

[26] I will convene a further conference of the parties to address the appropriate remedy and quantum of any potential compensation.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR724400>

 1   Peter Ioannou v Northern Belting Services Pty Ltd[2014] FWCFB 6660, [17] (Justice Boulton, Senior Deputy President

Deputy President Gostencnik, Commissioner Johns).

 2   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & Anor v FMP Group (Australia) P/L[2013] FWC 2554, [31] (CEPU v FMP Group).

 3   [2008] AIRC 135, [30].

 4   See Marson v Coral Princess Cruises (N.Q.) Pty Ltd T/A Coral Expeditions[2020] FWC 2721; (2020) 295 IR 273, [7].

 5   Coal & Allied Mining Services Pty Ltd v MacPherson [2010] FCAFC 83, [13]-[15]. While this case is interpreting the Workplace Relations Act 1996, s 691A(1) is in largely the same terms as s 524 and I consider that interpretation relevant.

 6   Australian Federation of Air Pilots v Bristow Helicopters Australia Pty Ltd [2016] FWC 8515, [62] (Bristow Helicopters).

 7   Bristow Helicopters Australia Pty Ltd v Australian Federation of Air Pilots [2017] FWCFB 487, [45]-[46].

 8   Marson v Coral Princess Cruises (N.Q.) Pty Ltd T/A Coral Expeditions[2020] FWC 2721; (2020) 295 IR 273, [12].

 9   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & Ors v Qantas Airways Limited [2020] FCA 656, [23], quoting Australian Education Union v Department of Education and Children's Services (2012) 248 CLR 1, [26]-[28].

 10   Vehicle Builders Employees Federation of Australia v British Motor Corporation (Aust) Pty Ltd (1966) 8 FLR 70, 74-75.