Kiah Anastasia Shanks v Schwartz Family Co

[2021] FWC 6332

[2021] FWC 6332

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.526—Stand down

Kiah Anastasia Shanks
v
Schwartz Family Co
(C2021/5226)

DEPUTY PRESIDENT LAKE BRISBANE, 12 NOVEMBER 2021

Application to deal with a dispute involving stand down – s 524 of the Fair Work Act 2009 (Cth) – stand down in relation to a stoppage of work

[1] This decision is in relation to an application by Kiah Anastasia Shanks (the Applicant) pursuant to s.526 of the Fair Work Act 2009 (the Act). The Applicant contends that Schwartz Family Co (the Respondent) stood her down in contravention of s.524 of the Act.

[2] The matter was allocated to my Chambers on 2 September 2021. On 13 September 2021, a conference was convened. By that time, the Applicant had returned to work, though she pressed for payment for the stand down period. The parties were unable to resolve the matter by agreement, so directions were sent requiring the parties to provide submissions and any documentation relevant to their claim. A hearing took place before me on 8 October 2021, at which the Applicant appeared for herself and Danielle Collett and David Brook appeared on behalf of the Respondent.

Background

[3] It is uncontentious that the Applicant was employed by the Respondent on a permanent full-time basis and was entitled 38 hours per week of work at the Respondent’s hotel on the Gold Coast. This occurred on a rotating roster made up of eight-hour shifts, five days a week and would usually be five days on, two days off. She would mostly work weekends so her rostered days would be during the week.
[4] As in many other parts of the country, the COVID-19 pandemic has had devastating effects on the hospitality industry on the Gold Coast. The Respondent’s business was no exception. Between 1 August 2021 and 8 August 2021, a Public Health Order was in place which mandated a lockdown for all non-essential activities. The Respondent’s business proceeded on a “skeleton staff” arrangement.

[5] The Applicant worked shifts on 1 and 2 August 2021, as the business was still operating during the lockdown and she was deemed an essential worker. On 3 August 2021, the Applicant received a phone call from the Respondent informing her that she was to be stood down without pay until the end of the lockdown mandate, which was 8 August 2021. She received another letter informing her that she was to be stood down without pay letter until 9 August 2021. A subsequent letter was issued extending the stand down until the 13 August 2021.

[6] The Applicant was rostered and worked a shift on 13 August 2021 but was not offered any work in week on 16 August 2021 until 21 August 2021. She completed her first shift back on that day and then worked her normal shift on 22 August 2021.

[7] On 11, 18 and 19 August 2021 respectively, the Respondent sent the Applicant correspondence asking her (and the other staff who received similar letters) to consider an agreement which temporarily reduced her hours in light of the crippling effect that the pandemic had upon the business. The letter invites the recipient to sign and return the variation if they agree. On each occasion, the Applicant did not agree, so she did not respond and assumed – given she received no further communication from the Respondent – that she would be rostered for her usual hours.

[8] On 25 August 2021, the Applicant received a call from her supervisor. The Applicant’s evidence was that this was the first time her shifts had been discussed with her. She says her supervisor stated that her manager had said that if the Applicant did not sign the variation, she could not be rostered. The supervisor suggested that the Applicant take it up with the Human Resources manager.

[9] On 26 August 2021, the Applicant received further correspondence from the Respondent, extending the stand down to 6 September 2021.

[10] On 30 August 2021, the Respondent again wrote to the Applicant inviting her to consider a temporary change to her employment (being a reduction in hours) until 18 September 2021.

[11] On 31 August 2021, the Applicant received further correspondence from the Respondent, indicating that because she had not accepted or acknowledged the offer of temporary reduced hours, she would continue to be stood down until 19 September 2021.

[12] The Applicant was reinstated on 8 September 2021.

Applicant’s material

[13] The Applicant’s role includes checking guests in and out, answering telephone and email enquiries, taking payments, filing paperwork, storing luggage, answering general questions, booking and managing room allocations, reporting, and receipt balancing procedures.

[14] The Applicant does not dispute that she was validly stood down between 8 and 13 August 2021. She claims, however, that the two further periods of stand down between 13 and 16 August 2021 (the First Stand Down) and 26 August to 8 September 2021 (the Second Stand Down) were not in accordance with s.524 because there was no genuine stoppage of work during these periods and, she says, she could have been usefully employed.

[15] The Applicant asserts that between 13 and 16 August 2021, the Respondent recommenced taking bookings and accepting guests. Although the Applicant accepts that the hotel was operating at a lower-than-normal occupancy and only accepting customers or guests from within Queensland (as compared to its normal interstate business), she asserts there was no cessation to trade or stoppage of work since the hotel reopened on 13 August 2021. The Applicant avers that this is not a case where a stoppage of work should be in dispute, given the principles outlined in my decision of Marson vs Coral Princess Cruises (N.Q.) Pty Ltd T/A Coral Expeditions. 1 She claims that the hotel was open, operating and performing usual activities, albeit in a reduced capacity. Guests were checking in, booking and otherwise engaging with the hotel and the Applicant’s role was still required for the function of the business. She says this is demonstrated by the rosters that always have someone fulfilling the role that she does.

[16] Even if guests were coming in reduced numbers, the Applicant states that she could have been usefully employed because there was work to be done arising from bookings and the guests that were there, as well as a backlog of work that is neglected during busy times that could have been attended to. She has worked in five different departments over the last five years of her employment and thus has extensive knowledge in the areas of Retail, Food and Beverage, Kids Club, Reception and Reservations. She claims that to say she did not have the skills or capacity to be usefully employed and potentially redeployed to a range of different duties is untrue.

[17] The Applicant submits that she faced undue pressure to sign a waiver to work reduced hours, and because she did not agree to that major change, was denied her full-time hours. She says that was particularly so in respect of the Second Stand Down.

[18] The Applicant further asserts that during the impugned Stand Downs, she is aware that casual staff were offered shifts that she could have fulfilled. She also claims that though she refused to sign the waiver, she never refused a shift that was offered to her. She says she did not sign the waiver because it was open-ended and imprecise.

[19] On that basis, she claims that First and Second Stand Downs were not in accordance with s.524 and so seeks compensation for her lost wages during that period. Specifically, the Applicant says she should have got an extra three days in the week of 16 August to meet her full-time hours.

Respondent’s material

[20] Mr Brook gave evidence on behalf of the Respondent. His evidence was that the pandemic has been catastrophic for their business. In 2021 alone, during August, the hotel was at approximately 10% capacity, in September and October it ran at less than 38% capacity and in November, it was forecasted to run at 22% capacity. JobKeeper was no longer available to them. The business is running at a loss and management is making every effort to retain their workforce and share the limited available work amongst their employees fairly and as equally as possible. They have sought to retain and look after all their staff as best they can. That has been possible because most of the team have been flexible and worked with management to share the work around the entire team equally. They have tried their best to communicate these matters to all employees. Given the restrictions that have been in place intermittently and the size of their workforce, they felt the best way to do so was via email. Every employee, apart from two, agreed to the temporary reduction in hours. One of those that did not agree to the reduction had obtained work elsewhere and the other was the Applicant.

[21] Mr Brook’s evidence was that priority has been given to full time and part time employees. Casuals were only engaged when the full time or part time employees could not fill the requisite hours. The Applicant pressed Mr Brook in cross-examination as to why casuals have been given shifts that she could have filled while she was stood down during the First and Second Stand Down. He said that this was because she had refused those shifts (by failing to communicate with them following the letters that they had sent her) and all other full time and part time staff had been provided with hours.

[22] The Applicant asked Mr Brook in cross-examination why she had not been rostered on to complete tasks associated with the administrative backlog. He said words to the effect that the Respondent “has so much work that needs to be done but [we are] in financial turmoil. We are running at a loss. We are burning money.” He went on to say that the Respondent could not afford to have people doing the “nice-to-haves. We are in survival mode.”

[23] The Applicant also asked Mr Brook why she was not offered the opportunity to retrain or be redeployed into housekeeping. He replied that he could not afford to train people in new roles and, significantly, to do so would unfairly take hours away from the existing housemaids. Many of them are part time employees who are already on limited hours like the rest of the workforce. Mr Brook stated that with exceedingly low occupancy rates, the Respondent simply could not maintain full fleet of staff and most staff, including himself, who would ordinarily work in a full time capacity are not able to do so.

[24] Mr Brook stated that the Respondent would have done anything in its power to not be in – and to not have their employees in – their current predicament. However, the pandemic, the lockdowns and the consequences of the government’s restrictions, are simply beyond their control. The Respondent has done its best to maintain as many staff as possible and treat them all fairly and equally.

[25] The Respondent also attached to their submissions the hours that the Applicant would have been offered had she agreed to the variation. They stated that although they may appear minimal, these were in fact more than the average employee because of the Applicant’s diverse skill set. That said, they were balanced against other employee’s rights to work as well. The Respondent was trying to share what minimal work was available.

[26] The Respondent rejects the Applicant’s assertion that she was subjected to adverse action as a result of her actioning her workplace rights. The deterioration of business operations was out of the Respondent’s control and had a direct impact on all positions within the resort. The Respondent submits it is important to note that it is the position that is stood down, not any particular staff member as a punishment. Most of the correspondence sent to the Applicant in respect of the proposed temporary reduction in hours or the stand downs indicated that she should contact Human Resources if she had any questions. She did not avail herself of that invitation until quite late in the piece. Due to the slight upturn in business conditions in early September, staff who had agreed to the temporary variation had also returned to their usual hours of work. Whilst the business is still experiencing the ongoing effects of COVID-19, the staff were brought back to maintain their workforce as best they could during these difficult times.

[27] The Respondent further submitted that more than 80% of their staff have continued to be on reduced hours, while the Applicant has been returned to full duties due to a slight increase in business demands and their ability to utilise her across two departments. The Respondent believes that their stance was more than fair and demonstrates that they were not unduly reducing the Applicant’s hours or treating her any less favourably than any other staff member. Further, the Respondent states that it has managed to retain their entire team through this trying period, even though they are still running at a loss, the borders remain closed and there is much uncertainty throughout the world.

[28] Finally, the Respondent submits that clause 11 of the Applicant’s contract of employment allows for stand down due to unforeseen events that the employer cannot reasonably be held responsible for. The pandemic is not a short term event. To date, it has been over 18 months of operating in survival mode with no end in sight for the hospitality industry and the Respondent submits that it has needed to consider all of its 270 staff and their families fairly, not the needs of any one individual.

[29] The Respondent also wished to note that in the course of these proceedings the Applicant removed sensitive documentation from the Respondent’s computer system without permission. This conduct is a misdemeanour under her employment contract. The Respondent was particularly disappointed given at the last conference before myself, I made it clear that if the Applicant needed information from the Respondent, she should ask them directly or seek the Commission’s assistance. The Applicant apologised for this conduct and said it was an honest mistake.

The Legislation

[30] Part 3-5 of the Act relates to stand down. Specifically, s.524 provides for when an employer may stand down employees:

(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.

[31] Section 526 provides for when the Commission may deal with such a dispute:

(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.

[32] In considering what constitutes a ‘stoppage of work’ in City of Wanneroo v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, Williams C applied the dictionary definition, stating: 2

“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.”

[33] A mere reduction in available work cannot constitute a stoppage. This would go against the ordinary definition of a ‘stoppage’. 3 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.4 In Bristow Helicopters Australia Pty Ltd v Australian Federation of Air Pilots, for example, it was clear the employer could still engage in trade and there was sufficient useful work that could be undertaken.5

[34] It is uncontentious that for a period the Respondent had to entirely halt trade due to a government directive arising in response to COVID-19. The Applicant does not dispute that a stoppage of work occurred and that the stand down in respect of it was within the terms of s.524.

[35] However, the Applicant asserts that the First and Second Stand Downs did not meet the test required in s.524 of the Act. The Respondent conceded that from the middle of August the hotel was operating, albeit in a substantially reduced capacity. It did so during the First and Second Stand Down described by the Applicant. The Respondent asserts that given the dramatic reduction in occupancy and thus operational requirements, it was not feasible to have all staff rostered on for their hours. That was why they took the difficult step of asking staff members to agree to a temporary reduction in hours. Even with the majority of staff agreeing to that course, the business continues to operate at a loss due to the low occupancy rates.

[36] Given the strict test that is set out in s.524 of the Act, I must find that there was not a genuine stoppage of work during the First and Second Stand Down. Each function of the hotel was still in operation, albeit in a severely reduced capacity. Accordingly, the First and Second Stand Down were not stand downs under the Act.

[37] The Applicant seeks the remuneration that she did not receive during the First and Second Stand Down.

[38] Earlier this year, the Full Bench of this Commission considered whether the Commission had the power to make a monetary order arising out of a claim brought under s.526 of the Act in Carter v Auto Parts Group Pty Ltd. 6 There, the Full Bench stated that:

“Applying the principles stated in Re Cram to the Commission’s functions under s 526, it seems to us that while the Commission cannot make a monetary order in grant of a claim for an entitlement to wages said to be owing under an award or a contract of employment, the Commission is empowered to make a monetary order to resolve a stand down dispute based on its consideration of what is a fair outcome between the parties and other issues relevant to the industrial merits of the matters and, in doing so, is entitled to take into account whether, in its opinion, the stand down was authorised by s 524(1).” 7

[39] The Full Bench went on to say that:

“An approach whereby a dispute concerning a stand down is resolved by the making of a compensatory order consequential upon the formation of the opinion by the member that the stand down was not authorised by s 524(1), and which is made taking into account the business circumstances of the employer at the time of the stand down, any loss of income suffered by the employee, the efforts made by the employee to mitigate their loss, the current financial circumstances of the employer and employee and any other matter bearing upon the paramount consideration of fairness between the parties, would in our view be available as a matter of power under s 526.” 8

[40] Having regard to that salient guidance provided by the Full Bench, I turn now to the circumstances of this case. As I have stated above, I have found that the stand down was not authorised by s.254 of the Act. That said, as the Full Bench suggests, I must take into account a range of circumstances in deciding whether to exercise the power afforded to me in s.526 to make a monetary order to resolve the stand down dispute between the parties.

[41] I have considerable sympathy for the Respondent who has navigated its way through an incredibly difficult time and has sought to look after all staff fairly and equally. Undoubtedly, each individual employee would have felt the impacts of the Respondent’s attempts to do so which took the form of a temporary reduction in hours, and thus, remuneration. All but two accepted this arrangement, seemingly with an understanding that the business was doing its best in unprecedented circumstances. Of the two that did not, one found alternative work and the other was the Applicant.

[42] I appreciate that the Applicant no doubt had her own interests to consider and being without a full time income would have been difficult, frustrating and incredibly stressful. I do not seek to detract from that. However, the Applicant’s refusal to accept the reduced hours, and then to seek to bring this application to recoup the remuneration she would have received had she not been stood down for a brief period, despite now having been returned to work in a full time capacity, seems out of touch with the realities of the industry in which she works. The Applicant’s attitude seemed particularly evident when she asked why she could not take on the role of housemaid. One would think that any reasonable person would have understood that to pay someone to be retrained into a new role would have been a huge burden on an employer in financial turmoil. More importantly, as pointed out by Mr Brooks in his evidence, to do so would deprive other hardworking employees of their own hours and income. Even to provide the Applicant with her full time hours in the role that she ordinarily perform would deprive others who also perform those roles of their income. It seems that the business and most of its staff understood that given the difficult circumstances caused by the pandemic, it was best to share the burden equally. The Applicant did not share that perspective.

[43] In determining this dispute, the Act requires me to take into account fairness between the parties concerned. In light of the facts set out above, I do not think it would be an appropriate exercise of the power awarded to me under s.526, to make any monetary orders in favour of the Applicant any in the matter. To do so would not be fair to either the Respondent or the approximately 268 other staff who agreed to the temporary reduction in hours to share the burden of the pandemic.

[44] Accordingly, I find that the First and Second Stand Downs were not stand downs in accordance with s.524 of the Act. However, for the reasons set out above, I decline to make the monetary orders sought by the Applicant.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR735753>

 1   [2020] FWC 2721.

 2   [2008] AIRC 135 [30].

 3   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].

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

 5   Bristow Helicopters Australia Pty Ltd v Australian Federation of Air Pilots [2017] FWCFB 487.

 6   Carter v Auto Parts Group Pty Ltd [2021] FWCFB 1015.

 7 Ibid [27].

 8 Ibid [31].