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UpdatesJul 29, 2020

JobKeeper-enabling directions need to be fair for all employee categories

A JobKeeper-enabling direction given by an employer to an employee of the employer does not apply to the employee if the direction is unreasonable in all of the circumstances.

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In a previous bulletin we discussed a legal challenge made against a JobKeeper-enabling direction issued by an employer requiring its employees’ normal working hours to reduce to 50 hours per fortnight (TWU v Prosegur (2020)). The Fair Work Commission (FWC) determined the direction was not unreasonable because the employer had a rational and reasonable basis to issue the direction.

This decision was successfully appealed on the ground that the FWC didn’t consider whether the impact of the direction was inequitable, unfair or unjust in terms of the impact on the employees subject to the direction.

A JobKeeper-enabling direction given by an employer to an employee of the employer does not apply to the employee if the direction is unreasonable in all of the circumstances. On appeal the FWC Full Bench ruled that, when assessing whether a direction is unreasonable, regard should be had to the balance between the employer’s interests in keeping their businesses viable and maintaining the contribution of employees to their business, with employee interests including the maintenance of employment and the continuation of productive employment during the pandemic.

Given the JobKeeper-enabling direction gives the employer power to modify or remove employee entitlements, the reasonableness requirement needs the employees’ interests to be considered.

The Full Bench made the following observations:

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