Employers can ask employees to take annual leave whilst on Jobkeeper – Village Roadshow vindicated in the Fair Work Commission on the term “unreasonable refusal”

The Fair Work Commission has vindicated Village Roadshow Theme Parks’ right to request employees on Jobkeeper to take annual leave. Although not going so far as a direction – the words “unreasonable refusal” found in the legislation gives Employers strong grounds to reasonably request employees to take annual leave (with some exceptions) – this is a significant decision highlighting some of the ways people can be managed during this COVID-19 crisis so that the business can still strive or in some cases survive.

In the matter of Leonie McCreedy v Village Roadshow Theme Parks Pty Ltd [2020] FWC 2480 which among other theme parks hires employees for Movie World on the Gold Coast, the Fair Work Commission held an employee to have unreasonably refused a request to take annual leave and made orders for the employee to take annual leave as requested by the employer.

Key Facts

• Village Roadshow issued the Applicant a JobKeeper enabling direction to stand down from work in addition to providing an annual leave request letter detailing the challenges facing Village Roadshow, with thanks given to employees for their continued support until normal operations are resumed. It noted that there has been a reduction of salaries for those in the Senior Leadership Team, a reduction of costs where possible, and a request for employees to use their leave entitlements.

• The JobKeeper provisions allow for employers to make such a request however, an employee must be left with a minimum balance of 10 days (two weeks). That said. as a part-time employee working two days per week, the minimum balance applicable to the Applicant was 4 days. Between annual leave and long service leave, the Applicant had a combined balance of 18 weeks of paid leave accrued. Village Roadshow requested the Applicant take 1 day of annual leave per week until the expiry of JobKeeper payments in September, at which point she would still have a remaining balance of 11 weeks paid leave accrued.

• The applicant refused Village Roadshow’s request and brought the application before the Commission where she submitted she had not unreasonably refused the request for the following reasons:

1. her lengthy period of service and annual leave accrual;
2. her medical condition (not disclosed);
3. her desire to take future holidays that have largely been paid for;
4. the consideration that some holidays had been approved but have now been cancelled due to the covid-19 pandemic;
5. the consideration that she had recently requested annual leave be approved and it has not yet been approved;
6. the very large size of Village Roadshow and its solid financial position;
7. the inherent unfairness that casual employees receiving JobKeeper payments are not, to her knowledge, disadvantaged;
8. the inherent unfairness that employees receiving JobSeeker payments, as opposed to Jobkeeper payments are not requested to take annual leave in the way that she is being requested

Decision

• Firstly, the Commission had to consider if it had jurisdiction to make orders regarding the dispute. The Commission held the nature of the dispute itself was not related to a JobKeeper direction but rather, it was a dispute involving the request made by Village Roadshow to take annual leave at the rate of one day per week, and the Applicant’s subsequent refusal. In this regard, the Commission was satisfied it had jurisdiction to make relevant orders on the dispute.

• In response to the Applicant’s submissions the Commission considered the following:

1. The Applicant had planned and paid for trips without the prior approval of Village Roadshow, which is contrary to their leave policy.
2. The Applicant did have a substantial balance of accrued leave and the request by Village Roadshow would place her balance below the legislative threshold of a minimum of two weeks.
3. The Applicant was a part-time employee who was receiving practically double her normal earnings whilst receiving JobKeeper.
4. Although undisclosed in the decision, the commission considered the Applicant’s medical condition to not be serious enough to take into account. That said, the Commission noted that it would perhaps take into account circumstances where an employee had a serious medical condition requiring further surgery or lengthy treatment.
5. The Applicant had little regard for the position of Village Roadshow or the state of its business operations and was simply disappointed with being asked to reduce some of her accrued annual leave.

• On the premise of the above and among other smaller considerations detailed in the decision, the Commission held the Applicant’s refusal of Village Roadshow’s request to be unreasonable and relevantly ordered the Applicant to comply with the request.

Ramifications

• This decision provides a clear indication of what the Commission may consider to be reasonable grounds for an employee to refuse a request by an employer to take annual leave in accordance with the JobKeeper legislation. Notably, similar provisions have been included in some modern awards due to the COVID-19 pandemic and therefore the effect of the decision may have a wider impact.

• In future matters it can be discerned from the decision that the Commission will have regard to at least the following factors:

1. Does the employee have accrued leave and if so, how much?
2. Is there a leave policy in place, and if so, what does it say?
3. Has there been approved leave?
4. Is the employee suffering from a serious medical condition and if so, to what extent will complying with the request to take leave prejudice the employee?

If you are in a similar situation, feel free to call NB Lawyers – lawyers for employers to arrange an obligation free consultation on +61 (07) 3876 5111  

Written By

Jonathan Mamaril 
Director 
NB Lawyers – Lawyers for Employers 
[email protected]  
+61 (07) 3876 5111

        

Assisted By

William Sherry

Lawyer

NB Lawyers – Lawyers for Employers
[email protected]
+61 (07) 3876 5111

About the Author

Jonathan Mamaril leads a team of handpicked experts in the areas of employment law and commercial law who focus on educating clients to avoid headaches, provide advice on issues before they fester and when action needs to be taken and there is a problem mitigate risk and liability.  With a core value of helping first and providing practical advice, Jonathan is a sought after advisor to a number of Employers and as a speaker for forums and seminars where his expertise is invaluable as a leader in this area as a lawyer for employers.