Maritime Union of Australia Division of the Construction, Forestry, Maritime, Mining and Energy Union (MUA) v Fantasea Pty Limited

[2020] FWC 4925

[2020] FWC 4925

FAIR WORK COMMISSION

STATEMENT

Fair Work Act 2009
s 789GV - Application to deal with a dispute under Part 6-4C

Maritime Union of Australia Division of the Construction, Forestry, Maritime, Mining and Energy Union (MUA)
v
Fantasea Pty Limited
(C2020/6776)

DEPUTY PRESIDENT SAMS SYDNEY, 14 SEPTEMBER 2020

Application to deal with a dispute under Part 6-4C .

[1] On 4 September 2020, the Maritime Union of Australia Division of the Construction, Forestry, Maritime, Mining and Energy Union (the ‘CFMMEU’ or the ‘Union’) filed an application, pursuant to s 789GV of the Fair Work Act 2009 (the ‘Act’), in which the Union seeks to have the Fair Work Commission (the ‘Commission’) deal with a JobKeeper dispute under what is commonly known as the JobKeeper amendments to the Act.

[2] The Union set out what the dispute is about as follows:

‘1. The Applicant’s member Jason Gemerek is employed by the Respondent at Rozelle, Sydney NSW and is covered by the Fantasea Masters, Coxswains and Deckhands Enterprise Agreement 2019 (“the Agreement”). Attached and marked MUA-1 is a copy of the agreement.

2. Mr Gemerek is employed as a Coxswain by the Respondent on a casual basis.

3. Clause 17.3 of the Agreement provides for increases during the life of the Agreement with increases effective from the first full pay period on or after 1 August 2019; 1 August 2020 and 1 August 2021.

4. The increase that employees were entitled to receive on or after 1 August 2019 was made to employees in the form of backpay as a lump sum after commencement of the Agreement.

5. In the pay period 8 June 2020 to 21 June 2020 Mr Gemerek was paid his backpay to a total gross amount of $1,964.040. A copy of this pay slip is attached and marked MUA-2.

6. In response to the cessation of all non-essential services arising from the Government’s response to COVID-19, the Respondent wrote via email to its employees advising them that it’s non-essential services would need to cease. A copy of that email is attached and marked MUA-3.

7. On 25 March 2020 the Respondent advised Mr Gemerek by email that he was being stood down pursuant to section 524 of the Fair Work Act 2009 (the Act). A copy of that correspondence is attached and marked MUA-4.

8. Arising from its enrolment in the JobKeeper Scheme, the Respondent has received JobKeeper payments in relation to the Applicant’s members, including Mr Gemerek for the JobKeeper fortnights commencing 30 March 2020.

9. On 29 April 2020 Mr Gemerek was paid the JobKeeper subsidy in respect of the first JobKeeper fortnight. Mr Gemerek received the JobKeeper payment amount as required by Rule 10 of the JobKeeper Payment Rules. Attached and marked MUA-5 is a copy of Mr Gemerek’s pay slip for the JobKeeper fortnight commencing 30 March 2020.

10. Mr Gemerek continued to receive the JobKeeper subsidy for each JobKeeper fortnight until the pay period commencing 8 June 2020. In that fortnight, Mr Gemerek received the back pay that he was entitled to receive under the Agreement. Mr Gemerek was not paid the JobKeeper payment for that fortnight as is evidenced in MUA-2.

11. The Applicant contends that the Respondent has incorrectly applied the wage condition and minimum payment guarantee in sections 789GD and 789GDA of the Act and Rule 10 of the JobKeeper Payment Rules.’

[3] In accordance with the Commission’s fast-tracking process for dealing with disputes of this kind, I listed the dispute for conciliation on 8 September 2020. Ms W Carr and Mr M Cope appeared for the Union and Ms R Bernasconi, Partner, Seyfarth Shaw Australia, was granted permission to represent Fantasea Pty Ltd (‘Fantasea’ or the ‘respondent’), pursuant to s 596 of the Act.

[4] Following a robust discussion, it was apparent that the dispute was unable to be resolved. Fantasea maintained that the Union’s contention was not supported by the JobKeeper amendments or the JobKeeper Payment Rules, and that the respondent’s approach to the payments made to Mr Gemerek in the JobKeeper fortnight commencing on 8 June 2020 was correct, and confirmed by the Australian Taxation Office (‘ATO’). Ms Bernasconi submitted that given this, it would be inappropriate for the Commission to make any recommendation or express an opinion contrary to Fantasea’s position and particularly not to do so to other persons beyond the circumstances applying to Mr Gemerek.

[5] By consent, I directed the Union to file the precise recommendation and/or opinion it sought to have the Commission make and for the parties to file any further submissions on the matter by 4pm Friday 11 September 2020.

[6] The Union proposed the following:

‘Opinion

The Commission express an opinion that Fantasea, in offsetting backpay to Jason Gemerek in Jobkeeper fortnight 6 commencing 8 June 2020, has unreasonably applied:

1. the wage condition in s. 789GD of the Fair Work Act 2009 (the Act);

2. the minimum payment guarantee in s. 789GDA; and

3. the wage condition within the meaning of rule 10 of the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020.

Recommendation 1

The Commission recommends that Fantasea reverse its decision to offset the backpay owed to Jason Gemerek against the jobkeeper payment paid to Fatansea for Jason Gemerek for JobKeeper fortnight 6 by paying Jason Gemerek the jobkeeper payment amount of $1,500 in respect of fortnight 6.

Recommendation 2

The Commission recommends that Fantasea reverse its decision to offset the backpay owed to all its employees against the jobkeeper payment paid to Fatansea for its employees for JobKeeper fortnight 6 by paying said employees the amount of $1,500 in respect of fortnight 6.

Order

The Commission orders that within seven days the CFMMEU and Fantasea confer in light of … this opinion and these recommendations with a view to resolving the dispute on the terms of Recommendations 1 and 2.’

[7] Fantasea’s submissions were as follows:

‘1. It is clear that the Commission, in dealing with a dispute pursuant to s789GV cannot arbitrate to determine whether Fantasea has complied with s789GF or s789GDA, nor can it order Fantasea to pay amounts to which the employee claims to be legally entitled (Qantas v Mazzitelli [2020] FWCFB 2628).

2. The effect of the opinion and recommendation sought by the CFMMEU would be to apply significant industrial pressure on Fantasea to make a payment to Mr Gemerek. A recommendation has industrial impact and it is not to the point that it is non-binding: for example, see decision of the Full Bench of the AIRC in Qantas Airways Limited and Transport Workers Union [2007] AIRCFB 915 at [27].

3. The CFMMEU relies on the decision in Mazzitelli v Qantas Airways Limited [2020]. However, that decision is distinguishable in a number of respects to the facts in this matter including the following:

(a) Mr Mazzitelli performed some work in the period covered by the payment;

(b) Mr Mazzitelli was paid monthly;

(c) Rule 10(3) of the JobKeeper Payment Rules permitted the FWC to consider the reasonableness of the payments made to Mr Mazzitelli by virtue of the following provision applicable only to employees paid other than fortnightly:

“If there is a regular period for which the employer would usually pay employees in relation to the performance of work by the employees, and that period is longer than a fortnight, then in applying this section those payments are to be allocated to a fortnight or fortnights in a reasonable manner.” (our emphasis)

The “reasonableness” test applied in the Qantas matter does not apply in the same way in this matter because the employee’s pay period is fortnightly aligned with the JobKeeper fortnights and so Rule 10(3) does not apply.

4. We also disagree with the characterisation urged by the CFMMEU that Fantasea “offset the backpay owed to Jason Gemerek against the jobkeeper payment for Jason Gemerek for JobKeeper fortnight 6”. Such a characterisation is incorrect and should not be accepted by the Commission in framing up any recommendation made (if any) for the reasons set out below.

5. The opinion and recommendation proposed by the CFMMEU incorporate a notion of “fairness” as to how they wish or hope that the provisions would operate rather than the way that the provisions do operate. The scheme is simple as it applies to the current facts:

(a) Mr Gemerek was paid the full amount of backpay owed to him of $1964.

(b) The obligation to make that payment did not arise until the new enterprise agreement was approved on 2 June 2020.

(c) Mr Gemerek was stood down and did not perform any work in the relevant fortnight.

(d) As he was eligible for the JobKeeper scheme, he was entitled to receive a minimum of $1,500 in that fortnight, which he did.

(e) The backpayment was for salary and wages and was paid to the employee in JobKeeper fortnight 6.

(f) The employee would have received that payment whenever the EBA was approved. It happened to be while the JobKeeper scheme was in force and the employee was stood down not performing any work, which means that the employer receives a wage subsidy pursuant to the scheme if the wage condition is met.

(g) For the reasons set out above and in the Employer’s Response, Fantasea has satisfied the wage condition (we note that the FWC JobKeeper Bench Book under the heading “Wage Condition” contains the same link to the ATO’s website as was contained in our Employer Response at paragraph 1.11 and footnote 1, namely: “Information about when payment must be made to satisfy the wage condition is available on the ATO’s website, at Paying your eligible employees – When to pay.”)

6. The JobKeeper scheme does not entitle Mr Gemerek to “a JobKeeper payment” in a particular fortnight. It entitles him to receive no less than the value of the amount the employer receives from the government for the eligible employee under the scheme, namely $1500 per fortnight. The Explanatory Memorandum for the Coronavirus Economic Response Package Omnibus (Measures No. 2) Bill 2020 states:

Section 789GD (Obligation of employer to satisfy the wage condition)

1.20 Sections 6(1)(d) and 10 of the JobKeeper payment rules require the sum of amounts paid (or otherwise handled in ways permitted by those rules, such as by making salary sacrifice superannuation contributions for employees or withholding tax amounts) by an employer who is entitled to a JobKeeper payment for an individual for a fortnight, to equal or exceed $1,500 in the fortnight (this is the wage condition of the JobKeeper payment rules).

and

2.5 The payments under the framework are intended to support entities that are directly or indirectly affected by the Coronavirus. The JobKeeper Payments announced on 30 March 2020 are intended to be delivered under this payment framework.

and

8.3 New Part 6-4C also requires JobKeeper qualifying employers to meet minimum payment obligations to employees who are subject to these arrangements, including by ensuring that at least the value of JobKeeper payments they receive through the Commissioner is passed on to such employees each fortnight, or the amount they would receive for the work they have performed if that would be greater.

7. In performing its functions or exercising powers in relation to a jobkeeper dispute, the Commission must take into account the objects of Part 6-4C of the Act which make clear that:

“The purpose of this Part is to assist employers who qualify for the jobkeeper scheme to deal with the economic impact of the Coronavirus known as COVID 19.”

8. FWC must also take into account fairness of both parties in resolving any dispute (s789GV(7) of the Act).

9. For the reasons set out above and in the Employer’s Response, it would not be fair to Fantasea for FWC to express an opinion or make a recommendation in the form sought by the union. To do so would be inconsistent with the terms and intent of the legislation and would create unreasonable industrial pressure that is not warranted.

10. Furthermore, when regard is had to fairness for other employees, the result contended for by the CFMMEU would result in a relative windfall for Mr Gemerek compared to other employees, for example:

(a) Mr Gemerek is in no different situation to employees who were stood down who were not eligible for the JobKeeper scheme. The only difference is that Fantasea was not entitled to a $1500 per fortnight government subsidy for backpayments to the non- eligible individuals; and

(b) For employees who were performing some work in the period, they would not receive any additional payment from Fantasea unless and until they had worked for the equivalent of $1500 in the fortnight because of the operation of s789GDA(2)(b) of the Act.’

[8] On one view, it may be observed that the circumstances of this dispute disclose a tension between two long held industrial principles and the purpose and intent of the JobKeeper amendments. These are:

1. The well-accepted industrial principle that a payment to an employee for a particular purpose, is not ordinarily able to be offset by reference to a payment for an unrelated purpose.

2. There is no doubt that there is a dispute, as that term is normally understood in the industrial lexicon, between the Union on behalf of Mr Gemerek and his employer, Fantasea.

3. JobKeeper is an emergency and temporary wage subsidy with a dual purpose during the COVID-10 pandemic. It is to assist employers to maintain their business and to retain a connection between the employee and the employer, in circumstances where the employer is under significant financial stress and might not otherwise be able to meet its wage obligations on its own.

[9] When viewed in this way, it is difficult to reconcile an emergency wage subsidy due to COVID-19, as being able to be offset by a payment owed to an employee arising from an enterprise agreement, negotiated well before the JobKeeper amendments and which, by a quirk of timing, happens to be payable during a fixed JobKeeper fortnight.

[10] That said, there is much force to Ms Bernasconi’s submissions that the JobKeeper amendments and the JobKeeper Rules are clear on their face, and the Commission has no power to make orders:

(a) as to the eligibility and administration of the JobKeeper scheme;

(b) as to whether the employer has complied with Section 789GD or s 789GA; and

(c) as to the payment of amounts to which the employees may be legally entitled; see: Qantas Airways Limited v Mazzitelli[2020] FWCFB 2628 at [33].

[11] Given these considerations and to cautiously avoid straying into jurisdictional error, I would be reluctant to give an opinion, make recommendations or orders as sought by the Union. To do so would almost certainly put Fantasea in a wholly unsatisfactory and untenable position.

[12] On the one hand, it is understandable that Fantasea is concerned that any such recommendation/opinion/orders would result in a degree of industrial pressure, to not only agree to accept such recommendation/opinion/orders in respect to Mr Gemerek, but to do so for a much wider cohort of employees, not presently comprehended by this dispute.

[13] On the other hand, I expect there would be a genuine hesitation on Fantasea’s part, as a model litigant, to reject a Commission recommendation when it would usually be expected to accept Commission recommendations.

[14] In the context of this dilemma, I am however not constrained from making a relatively neutral observation. It is at least arguable, that there is a distinction between the interpretation of the words ‘in the fortnight’ and ‘for the fortnight’, which appears in the JobKeeper amendments and Rules. There is no judicial exegesis on this subject. Lest I be misunderstood, I stress this is not a recommendation or opinion and I do not intend to say anything further on the matter.

[15] Accordingly, I decline to make the recommendations, give an opinion or make the orders sought by the Union and decline to deal with the application any further. The file will therefore be closed.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR722760>