Stand downs and the Fair Work Commission

This decision of the Fair Work Commission recently is a good analysis of the Fair Work Commission’s jurisdiction to review stand downs by employers under the Fair Work Act.

“Introduction

[1] Complete Hire and Sales Pty Ltd (Complete Hire) has lodged an appeal, for which permission to appeal is required, against a decision1 and order2 issued by Commissioner Williams on 8 February 2021.

[2] The decision and order concerned an application made by a former employee, Ms Kristy Kingston, pursuant to s 526 of the Fair Work Act 2009 (FW Act) for the Commission to deal with a dispute between her and her then employer, Complete Hire, about an alleged stand down from employment.

Statutory provisions

[3] The statutory regime for stand downs in the FW Act is contained in Pt 3-5. Section 524 provides:

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.

(2)  However, an employer may not stand down an employee under subsection (1) during a period in which the employee cannot usefully be employed because of a circumstance referred to in that subsection if:

(a)  an enterprise agreement, or a contract of employment, applies to the employer and the employee; and

(b)  the agreement or contract provides for the employer to stand down the employee during that period if the employee cannot usefully be employed during that period because of that circumstance.

Note 1:       If an employer may not stand down an employee under subsection (1), the employer may be able to stand down the employee in accordance with the enterprise agreement or the contract of employment.

Note 2:       An enterprise agreement or a contract of employment may also include terms that impose additional requirements that an employer must meet before standing down an employee (for example requirements relating to consultation or notice).

(3)  If an employer stands down an employee during a period under subsection (1), the employer is not required to make payments to the employee for that period.

[4] Section 526 provides for the Commission to deal with disputes about the operation of Pt 3-5 as follows:

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.

Note:          The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(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));

(b)  an employee in relation to whom the following requirements are satisfied:

(i)  the employee has made a request to take leave to avoid being stood down under subsection 524(1) (or purportedly under subsection 524(1)):

(ii)  the employee’s employer has authorised the leave;

(c)  an employee organisation that is entitled to represent the industrial interests of an employee referred to in paragraph (a) or (b);

(d)  an inspector.

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

[5] Section 527 provides that a person must not contravene an order made by the Commission dealing with a dispute about the operation of Part 3-5. Such an order is enforceable under Part 4-1 of the FW Act.

Facts

[6] The facts relevant to this appeal are set out by the Commissioner at paragraphs [4] to [46] of the decision. They need not be repeated other than in summary form.

[7] Complete Hire hires and sells accommodation, portable toilets, liquid waste disposals and event buildings to industries in Western Australia.

[8] Ms Kingston was employed in August 2019 in a full-time Sales Support role. By mutual agreement her position subsequently became part-time.

[9] Shortly thereafter Complete Hire engaged a second person working full-time in the role of Sales Support.

[10] In the last week of March 2020 in response to government directions regarding COVID-19, Complete Hire sent employees to work from home.

[11] At that time, another employee (Ms Tracy Dixon) was doing the same work as Ms Kingston but in a full-time position.

[12] On 30 March 2020, there was a meeting between Complete Hire and Ms Kingston as to her situation.

[13] Arising from that meeting Complete Hire held the view that it was Ms Kingston’s decision to no longer be at work from that day onwards because she could not attend work because she needed to take care of her child. Conversely, it was Ms Kingston’s understanding that she was stood down.

[14] At this point (late March and early April 2020) the situation was, according to the Commissioner, very unclear and the future highly uncertain for the business.

[15] Over the next couple of months, Ms Kingston made repeated attempts to contact Complete Hire to clarify her return to work. Only occasionally did she get a response and most responses did not answer the questions she asked.

[16] Throughout this period, Ms Kingston continued to receive payslips. In the pay period ending 15 April 2020 her annual leave was paid out by mutual agreement on account of Ms Kingston’s desire to secure some income. From then onwards, she received payslips for zero dollars regularly.

[17] Complete Hire was not eligible to be subsidised under the JobKeeper scheme and Ms Kingston did not receive JobKeeper payments.

[18] In late July 2020, having received no clarification from Complete Hire about her return to work, Ms Kingston pursued the matter through the Fair Work Ombudsman.

[19] Ms Kingston made her application to the Commission under s 526 on 10 August 2020.

[20] By letter dated 10 September 2020 Complete Hire advised Ms Kingston that her employment was terminated by reason of redundancy.

The decision

[21] In the decision, Commissioner Williams made three findings.

[22] Firstly, that Ms Kingston had been stood down from the end of April onwards.3

[23] Secondly, that the Commissioner was not satisfied that Ms Kingston could not be “usefully employed” within the meaning of s 524(1) of the FW Act.4

[24] Thirdly, that the stand down was not fair.5

[25] With respect to the first finding, the Commissioner concluded:

“[36] I do accept for the first few weeks of not attending work after 31 March 2020 her absence was by mutual agreement given the reduced downturn in the Respondent’s business and that schools were closed which necessitated Ms Kingston remaining at home to care for her child.

[39] Considering all the evidence I reject Mr Dillon’s evidence that Ms Kingston was always on leave without pay at her election.

[58] In this case there is little dispute as to what actually occurred. From the end of March 2020 through to when the Respondent dismissed the Applicant on 10 September 2020 the Applicant did not attend the workplace, did not work for the Respondent and was not paid by the Respondent other than for a pay-out of a small amount of accrued annual leave.

[59] It is apparent that up until around 29 April 2020 it was a mutually convenient for the Applicant to not attend the workplace and for the Respondent to allow her not to attend work

[62] The evidence is clear that as of 29 April 2020 the Applicant was ready willing and available to attend the workplace and work and has repeatedly asked when this would happen.

[63] The Respondent at no time asked her to return to work and continually indicated in general terms there was not work for her. Mr Dillon’s evidence at the hearing of this matter explained in detail that there was no work for the Applicant because of the impact of COVID-19 restrictions on its clients’ business and consequently the Respondent’s business.

[64] On the evidence I am satisfied there was a stoppage of work within the meaning of section 524 of the Act at the Respondent’s business. The cause of this stoppage was the various restrictions imposed by government to combat COVID-19 on the Respondent itself and the Respondent’s client. This was however a cause for which the Respondent could not reasonably be held responsible.”

[65] Whilst Mr Dillon may not be familiar with the law regarding stand downs, I am satisfied that by its actions, not allowing the Applicant to return to work, the Respondent had stood the Applicant down from her work from the end of April 2020 onwards.”

[26] With respect to the second finding, the Commissioner concluded:

“[66] I am however not satisfied that during this period the Applicant could not usefully be employed in any way because of these circumstances. Mr Dillon’s evidence was that for example if the Applicant had said she would be happy to clean she would have started the next day, not that this was ever asked of her.”

[27] With respect to the third finding, the Commissioner concluded:

“[74] The Respondent, by its actions, had stood down the Applicant not allowing her to return to work after schools reopened as she repeatedly requested. How the Applicant was treated was is in stark contrast to the fact that the Respondent allowed Ms Dixon to continue at work for five months and so to be paid.

[75] Mr Dillon when asked whether the work could have been shared between the Applicant and Ms Dixon said no it could not and that it would have been unfair to Ms Dixon (given she had a full-time position) to tell her she could not attend for work for two or three days a week. His evidence was that if he did share the hours between the Applicant and Ms Dixon, he expected he would wind up having the same discussion with Ms Dixon because it would not be fair to her.

[76] I do not accept Mr Dillon’s view. Whilst the Applicant did benefit for the first month whilst schools were closed in that the Respondent agreed to her remaining at home to look after her child (which was also beneficial for the Respondent which did not have enough work for both employees) for the next approximately four months before she was terminated the Applicant was severely disadvantaged, not being allowed to work and not being paid. To that extent she was treated very unfairly by the Respondent.”

[28] With respect to the order in resolution of the stand down dispute, the Commissioner ordered that Complete Hire pay Ms Kingston the amount of $7,175.16 within 14 days of the date of order (8 February 2021). In so doing, the Commissioner reasoned:

“[82] Had the 38 hours per week Ms Dixon worked every week between 29 April 2020 and 10 September 2020 been shared between the two employees Ms Dixon would have only worked 22 hours and the Applicant would have worked 16 hours a week.

[83] In fairness to the Respondent it would not be reasonable to make an order that the Respondent pay the Applicant an amount equivalent to 16 hours pay for each week when she has not been required to undertake the work for those hours. Consequently I have decided that I will discount the amount to be paid to resolve this dispute by one quarter such that the Applicant will be paid the equivalent of 12 hours per week, for the period between 29 April 2020 and 10 September 2020.”

Appeal submissions

[29] Complete Hire submits that the Commissioner erred in concluding that Ms Kingston had been stood down. It contends that the Commissioner made errors of fact in that:

  • the evidence of Mr Dillon that Complete Hire had not told Ms Kingston that she was stood down should have led to a conclusion that there was no stand down;
  • the evidence that the pay slips sent to Ms Kingston referred to her being on “leave without pay” during the period was evidence that she was not working. This should have led to a conclusion that there was no stand down; and
  • Ms Kingston did not suggest to Complete Hire any alternate work that she could perform during this period.

[30] Ms Kingston submits that there are no legal or factual errors in the Commissioner’s decision, and that the decision including the order made was reasonable and fair.

Consideration

Determination on the papers

[31] Complete Hire did not appear at the appeal hearing at the listed time of 2.00pm (AEST) 19 April 2021. Ms Kingston appeared on behalf of herself. On account of the non-appearance by Complete Hire, the Full Bench adjourned to ascertain the position of Complete Hire. By email from the Group Accountant sent to the Commission at 2.30pm (AEST) that day, Complete Hire advised that the officer dealing with the appeal was unexpectedly absent and stated:

“No-one else here is able to offer assistance on the matter. May we please seek leave from today’s hearing given [the officer’s] unexpected absence”.

[32] Upon reconvening, Ms Kingston advised that she had nothing further to put beyond her written submission.

[33] Accordingly, this appeal is determined on the papers.

[34] For the sake of completeness, it is noted that whilst Complete Hire sought in its Notice of Appeal a stay of the Commissioner’s order, it did not prosecute its application for a stay in advance of the appeal hearing.

Extension of time

[35] The appeal was filed on 3 March 2021. This is one day 6 beyond the 21-day period required by rules made under the FW Act for the lodgement of an appeal.

[36] An extension of time is required if the appeal is to be further considered. The usual principles applying to consideration of an application to extend time to lodge an appeal were summarised in the full bench decision in Jobs Australia v Eland7 as follows (footnotes omitted):

“[5] Time limits of the kind in Rule 56 should not simply be extended as a matter of course. There are sound administrative and industrial reasons for setting a limit to the time for bringing an appeal and it should only be extended where there are good reasons for doing so. The authorities indicate that the following matters are relevant to the exercise of the Tribunal’s discretion under Rule 56(2)(c):

  • whether there is a satisfactory reason for the delay;
  • the length of the delay;
  • the nature of the grounds of appeal and the likelihood that one or more of those grounds being upheld if time was extended; and
  • any prejudice to the respondent if time were extended.”

[37] The explanation for the delay is stated by Complete Hire as simply being:8

“The company needed more time to gather information, due to a public holiday.”

[38] In the absence of evidence to support this proposition, including evidence of how the public holiday in Western Australia on 1 March 2021 impacted the gathering of information and the lodgement of the appeal, this is not a convincing explanation for the delay.

[39] However, as the length of the delay is short and as the appeal can be disposed of on the papers, and as no apparent prejudice arises to Ms Kingston given that the order of the Commissioner has not been stayed, we consider, on balance, it appropriate to grant Complete Hire an extension of time in which to have filed this appeal.

Appeal principles

[40] An appeal under section 604 of the FW Act is an appeal by way of rehearing. The Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker.9 There is no right to appeal and an appeal may only be made with the permission of the Commission.

[41] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error10. However, the fact that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal11.

[42] An application for permission to appeal is not a de facto or preliminary hearing of the appeal. In determining whether permission to appeal should be granted, it is unnecessary and inappropriate for the Full Bench to conduct a detailed examination of the grounds of appeal12. However it is necessary to engage with those grounds to consider whether they raise an arguable case of appealable error.

Errors of fact

[43] Having closely examined the Commissioner’s decision, we are satisfied that the findings of fact made by the Commissioner were both open on the evidence advanced at first instance and were correct.

[44] We are not satisfied that the Commissioner made the errors of fact contended by Complete Hire.

[45] The Commissioner dealt with Mr Dillon’s evidence that Ms Kingston was, it was claimed, at times on leave without pay and Mr Dillon’s further evidence that he had not used the phrase “you’ve been stood down”.13 In that context, the Commissioner also took into account that there was no evidence that Ms Kingston had requested to be on leave without pay.14

[46] We are also satisfied that the conclusions the Commissioner drew from these findings were reasonable and logical. The mere fact that an employer does not tell an employee they are stood down does not preclude a finding that, in all the circumstances, an employee has in fact been stood down within the meaning of the FW Act. Similarly, the fact that an employer designates on a payslip that an employee is on “leave without pay”, does not make it so. These are findings to be made on an objective basis by the Commission, not on the basis of the belief or stated belief of one party or the other.

[47] The Commissioner conducted the objective analysis required, and in so doing, was not in error.

Other Errors

[48] Nor are we satisfied that the Commissioner’s decision evidences other errors. It was open to the Commissioner, in the exercise of the Commission’s jurisdiction to resolve the stand down dispute, to make a monetary order. As recently stated by a Full Bench of the Commission:15

“…the Commission may, taking into account fairness between the parties concerned, make an order requiring the payment of a monetary amount in the exercise of its arbitral powers to resolve a dispute concerning the operation of Part 3-5.”

[49] The quantum of the order was a determinative assessment made by the Commissioner based on relevant considerations. There was no error in that respect.

Conclusion

[50] The decision of the Commissioner discloses no appealable error of fact or law. Moreover, the decision raises no issue of principle, is not counterintuitive nor contrary to established authority.

[51] For these reasons, having granted an extension to file the appeal, permission to appeal is refused.”

Complete Hire and Sales Pty Ltd t/a Complete Hire and Sales Pty Ltd v Kingston – [2021] FWCFB 2212 – 22 April 2021 – Hatcher VP, Anderson DP and Bissett C