In a postscript to the lifting of lockdowns and the reopening of hospitality business, the Fair Work Commission (FWC) found a stand down of hotel employees unlawful – but declined to order the employer to compensate the affected employee.
In Shanks v Schwartz Family Co (2021), a full-time employee was working at a Gold Coast hotel when lockdown was enforced 1–8 August 2021. The employee was stood down without pay during and after the lockdown.
The Fair Work Act 2009 (Cth) (FW Act) allows an employer to stand down an employee without pay during a period in which the employee cannot usefully be employed because of a stoppage of work for any cause for which the employer cannot reasonably be held responsible.
The FWC ruled that the halt to trade due to a government directive in response to COVID-19 was a stoppage of work that permitted a stand down under the FW Act. However, from the middle of August, the hotel was operating, albeit in a substantially reduced capacity. Given the dramatic reduction in occupancy, the employer decided that it was not feasible to have all staff rostered on for their hours. This led to the request to employees to agree to a temporary reduction in hours. Even with most staff agreeing to that course, the business continued to operate at a loss due to the low occupancy rates.
The FWC ruled that there was not a genuine stoppage of work during the period after the lockdown because each function of the hotel was still in operation, albeit in a severely reduced capacity. Accordingly, the FW Act didn’t permit the stand down.
However, the FWC expressed considerable sympathy for the employer, which had navigated its way through an incredibly difficult time and had sought to look after all staff fairly and equally. All but two employees had agreed to reduce their hours. One found alternative work and the other was the applicant.
The FWC acknowledged that it would have been difficult, frustrating and incredibly stressful for the employee, but her 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, seemed out of touch with the realities of the industry in which she worked.
Taking into account fairness between the parties concerned, the FWC considered that it would be an inappropriate exercise of its power to make any monetary orders in favour of the employee. To do so would not be fair to the employer or the approximately 268 other staff who agreed to the temporary reduction in hours to share the burden of the pandemic.