Sections 524 and 525 of the Fair Work Act
107 The issue between Qantas and the appellant unions is whether, during a stand down period authorised by s 524 of the FW Act, Qantas is obliged to pay the wages of employees who are on PC&C leave. Broadly expressed, the position of Qantas is that:
(1) an employee who is lawfully stood down in accordance with s 524 of the FW Act cannot generate an entitlement to take PC&C leave; and
(2) s 524(3) of the FW Act relieves Qantas of any requirement to pay such an employee any monies in respect of PC&C leave.
108 Qantas resists the contention made by the appellant unions that s 525 of the FW Act permits an employee to take PC&C leave during a stand down period and therefore requires Qantas to pay the wages due to that employee whilst that leave is taken. In particular, the unions contend that access to paid leave (including but not limited to PC&C leave) is provided by s 525(b).
109 Responding to those contentions, Qantas argued that s 525(a) only permits access to leave that "is authorised by the employer" and that the leave contemplated by that paragraph is essentially limited to annual leave because, so it was said, that kind of leave requires employer authority. In that respect Qantas referred to s 88(1) of the FW Act which it asserted required employer authorisation as to the taking of annual leave. As for s 525(b), Qantas contended that that paragraph is not dealing with leave at all but only addressing those entitlements that the FW Act expressly refers to as an entitlement of an employee to be "absent". As that is done only in relation to eligible community service by s 108 of the FW Act, jury service by s 111 of the FW Act and public holidays by s 114 of the FW Act, Qantas contended that s 525(b) is only addressing access to those entitlements and not to an entitlement to PC&C leave or any other form of leave.
110 The competing contentions of the parties raised questions as to the proper construction of s 524 and s 525 of the FW Act. The relevant principles which guide statutory construction are not contentious, are referred to at [30]-[35] of the reasons of Rares and Colvin JJ, and need not here be repeated save that the irresistible clarity of the following summation deserves being mentioned. In Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Bay Street Appeal) [2020] FCAFC 192 at [3]-[5] Allsop CJ said this:
Much has been written by the High Court on statutory construction over 35 years, in particular about the relationship between text and context, including purpose. That discussion in the authorities reflects the perennial debate focused on particular statutory provisions, as they arise from time to time for consideration, between so-called clarity of plain meaning (as if such can reliably exist without context) and the ascription of meaning to words in their context. Whilst there can, naturally, often be differences of opinion about the effect and influence of context, including purpose, in respect of any particular provision, there can be no doubt that words are not read in isolation as if they can have meaning without context.
Whatever may be the form of expression by individual judges or groups of judges, the task requires the search for applicable principle, not an emphasis on the literality of words of judgments as if they were the text of a statute: Cassell & Co Ltd v Broome [1972] AC 1027 at 1085 (Lord Reid). Sentences from High Court judgments seen to be favourable to an argument should not be strung together in a particular order to support an argument about the construction of a particular statute, almost as if to create a new, virtual, High Court judgment. The principle is clear: Meaning is to be ascribed to the text of the statute, read in its context. The context, general purpose and policy of the provision and its consistency and fairness are surer guides to meaning than the logic of the construction of the provision. The purpose and policy of the provision are to be deduced and understood from the text and structure of the Act and legitimate and relevant considerations of context, including secondary material: See Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at 381 [69]; Mason J in K&S Lake City Freighters Proprietary Limited v Gordon & Gotch Limited [1985] HCA 48; 157 CLR 309 at 315 which drew upon Viscount Simonds in Attorney-General v Prince Ernest Augustus of Hanover [1957] AC 436 at 461 (cited in Independent Commission Against Corruption v Cunneen [2015] HCA 14; 256 CLR 1 at 28 [57] and in the other authoritative decisions of the High Court referred to in Federal Commissioner of Taxation v Jayasinghe [2016] FCAFC 79; 247 FCR 40 at 43 [5]); Commissioner of Taxation of the Commonwealth of Australia v Consolidated Media Holdings Ltd [2012] HCA 55; 250 CLR 503 at 519 [39]; Thiess v Collector of Customs [2014] HCA 12; 250 CLR 664 at 671-672 [22]-[23]; and SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; 262 CLR 362 at 368 [14].
There can be no doubt that the search for principle in the High Court reveals a settled approach of some clarity: R v A2 [2019] HCA 35; 373 ALR 214 at 223-225 [31]-[37]. The notion that context and legitimate secondary material such as a second reading speech or an Explanatory Memorandum cannot be looked at until some ambiguity is drawn out of the text itself cannot withstand the weight and clarity of High Court authority since 1985: see Jayasinghe 247 FCR at 42-44 [3]-[12]; and CPB Contractors Pty Limited v Construction, Forestry, Maritime, Mining and Energy Union [2019] FCAFC 70 at [8], [50]-[60].
111 There are some observations about the constructional task required which ought to be made at the outset. I have found the assistance provided by the submissions made by the parties substantially diminished by reason of what was said to be common ground before the primary judge. In particular, Qantas sought to put its contentions about the proper construction of s 524 and s 525 upon the platform of what appears to have been common ground before the primary judge that "the employees have been lawfully stood down" (at [9] of the primary judge's reasons). That common ground entails an implicit acceptance about the proper construction of s 524 and, as Qantas contended, a concession about its operation made by the appellant unions.
112 Sections 524 and 525 are related provisions and must be read together. The proper construction of s 525 cannot be arrived at without a proper understanding of what s 524 provides for and in particular the circumstances in which the relief provided to an employer by s 524(3) is engaged. It would be erroneous for this Court to construe s 525 upon a view about the proper construction of s 524 fixed by the parties even if it can be said that the common ground adopted by the parties entails a concession. As Rares and Colvin JJ have stated in their reasons at [25] "[t]he parties cannot make a concession that would bind this Court as to the proper construction of the statutory provisions"; see also Coleman v Power (2004) 220 CLR 1 at [243] (Kirby J).
113 I turn then to consider s 524 including so that my analysis of the meaning and intent of s 525 may be assisted by a proper understanding of the provision to which it relates.
114 Section 524 of the FW Act provides:
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.
115 Subject to the qualifications made by s 524(2) (which are of no present relevance), s 524(1) authorises an employer to stand down an employee during a period in which the facts and circumstances there specified pertain. Section 524(3) relieves an employer of an obligation to make a payment to the employee for a period in which the employee has been stood down under s 524(1).
116 The phrase "during a period" appears in each of sub-sections (1), (2) and (3) of s 524. The references made to a "period" are obviously references to a period of time, the duration of which (whether an hour, a day or a month) depends on the continued existence of the requisite facts and circumstances specified by s 524(1) which both enliven and control the extent of the period in which a stand down is lawful. In other words, at any moment in time, a lawful stand down is dependent upon the coexistence of the facts and circumstances which define the period because it is only whilst the requisite period pertains that s 524 is engaged.
117 The other necessary observation to make is that the focus of s 524 is upon circumstances affecting a particular employee rather than a class of employees. The "period" of which s 524(1) speaks (and in turn s 524(3) as well) is personal to the particular employee whose susceptibility to being stood down is being addressed. That is principally because the facts and circumstances which define the very existence of the period of which s 524(1) speaks are those facts and circumstances applicable to the particular employee. That is not to say that the defining or requisite facts and circumstances specified by s 524(1) may not be common across a number of employees in the same workforce at the same time, but it is to say that, because those requisite facts and circumstances may not be universally applicable across all employees, some employees may be lawfully stood down whilst others may not be.
118 The central pre-condition specified by s 524(1) is that "the employee cannot be usefully employed". In an analogous context that expression has been correctly referred to as "a fact": Amalgamated Engineering Union v Metal Trades Employers Association (1942) 47 CAR 615 at 616 (O'Mara J). It is an essential fact upon which the existence of a lawful stand down period and the engagement of s 524 depend. However, as will be apparent, the "period" of which s 524(1) speaks is not a period in which the employee cannot usefully be employed for any reason whatsoever. The period is confined to a time during which the employer cannot be usefully employed "because of" one or other of the circumstances specified, namely, industrial action, or a breakdown of machinery or equipment or a stoppage of work for which the employer cannot reasonably be held responsible. The period in which an employee may be lawfully stood down is circumscribed by the causal requirement imposed by s 524(1) that the inability of the employer to usefully employ the employee be one or other of the particular circumstances specified by that provision. Thus, it is only when and for as long as the essential fact exists in relation to the particular employee, by reason of one or other of the causes specified by s 524(1), that the employee is stood down in accordance with the authority provided by s 524.
119 Having made those observations about what appears to be the plain operation of s 524, I turn to consider whether an employee in a period of leave is able to be stood down in accordance with the authority provided by s 524.
120 It may be accepted that whilst in a period of leave from work, an employee cannot be usefully employed during that period. The obvious reason for that inability is that the employee is not available to perform work as the employee is authorised to be absent from the performance of work because of the employee's entitlement to take leave. The basis for such an absence will differ depending upon the kind of leave in question. The absence and any entitlement of the employee to be absent may be because the employee is ill or caring for a family member and therefore taking personal/carer's leave of the kind statutorily conferred by s 96 of the FW Act. Alternatively, an employee's unavailability to perform work may be because the employee is exercising an entitlement to be absent from work for the purpose of taking annual leave, or study leave, or parental leave or long-service leave. Alternatively, the entitlement to be absent may be founded upon the existence of a public holiday, or the employee being required to perform jury service or the activities identified in Div 8 of Pt 2-2 of Ch 2 of the FW Act under the heading "Community service leave".
121 Irrespective of the kind of leave and whether the entitlement is statutory or conferred by an industrial instrument or by contract, an entitlement to take a period of leave is by its very nature an entitlement to be absent from the performance of the work ordinarily performed by the employee: WorkPac Pty Ltd v Rossato [2020] FCAFC 84 at [226] (Bromberg J). An employee is not able to be usefully employed whilst in a period of leave because the employee is absent and therefore not available to be usefully employed. The authorised absence of the employee is the reason the employee cannot be usefully employed and that circumstance is not one of the causal circumstances specified by s 524(1).
122 That conclusion does not depend upon which cause may be said to be first in time - for instance the illness or alternatively a cause specified by s 524(1). That is because s 524(1) is only engaged if one or other of the causes it specifies is responsible for the fact that the employee cannot be usefully employed. The fact that the employee cannot be usefully employed because she is ill is irrelevant to the operation of s 524(1). That fact neither engages nor disengages the operation of s 524. The only fact relevant to whether s 524 is engaged is whether the employee cannot be usefully employed because of one or other of the causal circumstances specified by s 524(1). Whilst that positive and essential fact does not exist, s 524 is not engaged.
123 It should be noted as well that the word "because" in s 524(1) is not qualified in the way that the multiple uses of that expression in Pt 3-1 of the FW Act dealing with "general protections" are qualified by s 360. Section 524(1) requires that one or other of the causal circumstances it specifies to be the reason for the incapacity of the particular employee to be usefully employed, not a reason. For instance, if an employee could not be usefully employed because of the breakdown of one machine for which the employer is not reasonably responsible but is also unable to be usefully employed because of the breakdown of another machine for which the employer is responsible, s 524(1) is not engaged. The existence of a cause which is not specified by s 524(1), such as the employee being ill, as a contributing cause for the inability to employ the employee is irrelevant. The operation of s 524 depends upon the existence of the positive fact it requires as the cause for the particular employee not being able to be usefully employed. In the absence of that positive fact, the provision is simply not engaged.
124 That analysis is supported by the observations made by the majority in Re Rubber Workers Award 1947 [1949] 65 CAR 814. In that case the Full Court of a predecessor of this Court, the Commonwealth Court of Conciliation and Arbitration, considered the operation of a clause in an industrial award which permitted an employer to:
…deduct payment for any day or part thereof an employee cannot be usefully employed because of any strike by the Union, or any other Union, or through any breakdown of machinery, or any stoppage of work by any cause whatsoever which the employer cannot reasonably prevent.
125 The issue was whether during a period in which other employees of an employer had been stood down because of a stoppage of work, the employer was entitled under the award clause just quoted to deduct the payment due to an employee absent from work because of ill-health. Each of Foster and Dunphy JJ considered whether the employee was unable to be usefully employed because of the stoppage of work and concluded that the cause of the employee's inability to be usefully employed was ill-health and not by reason of one or other of the causal circumstances specified by the award provision. At 817, Foster J said this:
Because of his illness he could not be employed "usefully" or otherwise and strikes or breakdowns, etc., do not affect his position. He is sick and his wages are guaranteed free from deduction for the period specified in the award, and that right must persist until destroyed by some provision of the code of employment.
We may test this by looking at the position of an employer who asks himself: Am I entitled to deduct pay in this case? Am I able to say I could not usefully employ him on account of strike, etc.? The answer surely must be that he could not employ him at all because of his illness and not because of strike, etc.
126 Referring to the authority given by the award for the employer to make a deduction, at 818 Dunphy J said this (emphasis in original):
If, by reason of the matters referred to in the proviso, an employee cannot be usefully employed, then the employer can make a wage deduction. In other words, although the worker is able and willing to work, the employer's duty either to provide work or to pay the weekly wage is suspended. This proviso, however, has nothing whatever to do with clause 22 [dealing with paid sick leave]. It gives an employer relief against wage commitments for employable workers and has no reference whatever to the case of an employee whose contract of service is still continuing, but who is not employable. A man who is absent by reason of illness obviously cannot be usefully employed whether there was a strike or a break-down of machinery or any other stoppage of his employer's plant or machinery.
127 Whilst in a period of leave, an employee is not in a period in which the employee cannot usefully be employed because of one or other of the causal circumstances specified in s 524(1). Accordingly, an employer is not authorised by s 524(1) to stand down an employee during such a period. Consequentially, an employer is not authorised by s 524(3) to withhold payments due to the employee in respect of that period.
128 In Townsend v General Motors Holden's Ltd [1983] 4 IR 358, Morling J referred at 366-367 to Vehicle Builders Employees Federation of Australia v British Motor Corporation (Aust.) Pty Ltd (1966) 8 FLR 70 where a Full Court of another predecessor of this Court, the Commonwealth Industrial Court (Spicer CJ, Joske and Eggleston JJ), in dealing with a stand down provision similar to that dealt with in Re Rubber Workers Award, said (at [74]-[75]) that an employee is entitled to be paid "unless the employer can show that the employee cannot be usefully employed on that day for a reason falling within the clause above quoted" (emphasis added). At 364 Morling J said (emphasis added):
Clause 6(g)(i) gives GMH the right to make a deduction from an employee's wages in certain specified circumstances. If those circumstances do not exist, then GMH does not have the right to make the deduction.
129 I have reached those conclusions as to the proper construction and the extent of the operation of s 524 having considered the proper construction of s 525. I will return to that provision to explain its purpose and operation. But before doing that it is convenient to consider whether the meaning and operation of s 524 which seems apparent on a literal reading of its text, is supported by the discernible purpose of the provision.
130 The mischief to which s 524 is directed is apparent from the very rationale for a stand down provision. As Gaudron J recounted in Food Preservers Union of Australia v All States Ready Foods (1976) 182 CAR 391 at 391, stand down provisions were "introduced into awards of the Conciliation and Arbitration Commission in the 1920's to temper the effect of the change from daily to weekly hiring". In circumstances where an employee who "stands and waits" is entitled to be paid irrespective of whether that employee can be usefully employed (Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 at 466 (Dixon J)), the weekly hire of employees was more prone to impose upon employers the burden of paying the cost of employing an employee during a period in which that employee could not be usefully employed. Stand down provisions enabled employers to be relieved of that burden in certain circumstances. However, such provisions have never been open-ended because to do that would effectively have given to the employer the capacity unilaterally to convert ongoing (even if only weekly) employments into casual employments. Accordingly, limitations upon an employer's capacity to stand down an employee who could not be usefully employed were typically included in stand down provisions. Those limitations commonly took the form of those now found in s 524(1). For example, the clause to which Gaudron J referred in Food Preservers as having existed in the Food Preservers Award since 1935, is in familiar terms and was relevantly as follows:
An employer may deduct wages for any day on which the employee has not commenced work and on which the employee cannot be usefully employed because of any strike or through any breakdown of machinery or any stoppage of work for any reason for which the employer cannot reasonably be held responsible…
131 Where a stand down provision is confined by causal pre-conditions which limit the scope of relief provided to an employer, the mischief to which that provision is directed must be understood by reference to those limits. Correspondingly, the purpose of the provision must also be so understood. The purpose of providing relief to an employer must bear a connection to the mischief sought to be avoided. The intended relief is not open-ended but consequential upon the existence of certain circumstances. It is intended to relieve an employer from the financial consequence of the employer's inability to usefully employ the employee whose inability to be usefully employed has been brought about by one or other of the causal circumstances which limit the scope of the stand down provision. That the intended nature of the relief provided by a stand down provision is not open-ended but is consequential upon the causal circumstances that typically limit the operation of a stand down provision, is reflected in the following observations made by Morling J in Townsend at 368 (emphasis added):
The reason for the inclusion of the clause in the award is to afford GMH financial relief from the consequences of a strike or a breakdown in machinery or a stoppage of work for which it cannot reasonably be held responsible.
132 The financial burden upon an employer which a stand down provision seeks to address is a particular burden imposed upon the employer by particular circumstances. The financial burden upon an employer of providing leave to an employee is not a burden which is a consequence of a strike or breakdown in machinery or a stoppage of work for which the employer cannot reasonably be held responsible. It is a burden which arises as an incident of an employment referrable to an entitlement which usually accrues by reason of the employee having provided service to the employer. That is so irrespective of when the leave is taken or the burden is discharged including where leave is taken when a strike, breakdown in machinery or stoppage of work has resulted in other employees having no work to do at all. The financial burden of providing leave to an employee as and when leave is due is not the burden to which a stand down provision such as that contained in s 524 is directed. To relieve the employer of that financial burden would, by reference to the discernible purpose of a stand down provision such as s 524, provide an unintended windfall to the employer. It would result in the employer being relieved of a financial burden with no connection whatsoever to the employer's inability to utilise the employee because of a strike, a breakdown in machinery or other stoppage of work beyond the control of the employer. To construe s 524 as having that purpose would effectively re-write the provision so as to include the taking of leave as one of the causal circumstances for the employer's inability to usefully employ the employee.
133 To relieve the employer of the burden of providing leave would also disadvantage employees in a manner beyond the consequences contemplated by the discernible purpose of a stand down provision such as s 524. The relief provided to an employer by a stand down provision shifts rather than extinguishes the burden to which the provision is directed. The financial burden of there being no useful work to do is essentially shifted from the employer to the employee or those employees who cannot be usefully employed. Those employees rostered and available to work carry the wage-based consequence of there being no useful work for them to perform during a stoppage of work. If a work stoppage occurs on a Wednesday, it is the employees rostered and available to work on that day who are denied the wages for the day and not those employees rostered to work on the following day. That is because it is Wednesday's wage costs that would impose the relevant burden and not the cost of employing those employees who worked on Thursday. Likewise, in relation to an employee who is absent from work on the Wednesday on annual leave. The burden of that leave has nothing to do with Wednesday's wage costs and in particular the costs of those employees who could not be usefully employed on that day. There may well be fairer ways to spread the burden brought about by a particular employee having no useful work to do, but s 524 does not adopt any such mechanism.
134 On the construction contended for by Qantas, during a work stoppage of a kind referred to by s 524(1), an employee already on an extended period of sick leave would be denied paid leave from the moment the work stoppage commenced until it ended. If the work stoppage lasted an hour, the employee would lose an hour's pay, if a day, a day's pay and so on. Similarly for an employee in the midst of a period of annual leave or of parental leave. An employee who happened to fall ill on the second day of the work stoppage would be denied personal/carer's leave and similarly, an employee who happened to tragically lose a relative on that day, would be disentitled to compassionate leave. There is no discernible basis for thinking that those were the intended consequences of the operation of a stand down provision like s 524. Neither the authorities provided by the parties nor my own research of the authorities reveals that consequences of that kind have ever been experienced as a result of the operation of a stand down provision.
135 Insofar as the authorities to which the Court was taken demonstrate what may be regarded as the operation of the typical stand down provision, those authorities show that employees have not been denied leave entitlements as a consequence of the operation of a stand down provision. Relatedly, the authorities demonstrate that stand down provisions operate upon employees who are available to perform work during the stoppage of work and not upon those who are not. Some of the relevant authorities have already been referred to, other of those authorities are referred to in the reasons of Rares and Colvin JJ at [48]-[53]. It is of course necessary to acknowledge that the stand down provisions addressed by those authorities were considered in the particular context in which those provisions were found including the context provided by other provisions of the awards in question. Having said that, I do not regard either the wording or context of those provisions to have been materially different from those of s 524 in relation to the issue currently being addressed. Of more importance perhaps to the identification of the purpose and scope of the stand down authorised by s 524(1), is the fact of there being no demonstrated history of stand down provisions impacting upon the entitlements of employees whilst on leave. I say that principally because statutory stand down provisions in federal industrial legislation are a relatively recent phenomenon and it is likely that the purpose, scope and operation of those statutory provisions were modelled upon the common purpose, scope and operation of stand down provisions which, as indicated above, have been a feature of industrial awards since the 1920s.
136 Turning then to the legislative history of s 524 of the FW Act, the legislative predecessor to that provision is s 691A of the Workplace Relations Act 1996 (Cth) ("WR Act"). That provision was introduced by the Workplace Relations Legislation Amendment (Independent Contractors) Act 2006 (Cth), shortly after the WR Act was substantially altered by what have become commonly known as the 'WorkChoices amendments'.
137 Section 691A of the WR Act was the first federal statutory provision which authorised an employer to stand down an employee in circumstances of the kind now addressed by s 524(1). The provision is fully set out in the reasons of Rares and Colvin JJ, but it is convenient to set out again those parts of the provision of immediate relevance:
691A Employer may stand down employees in certain circumstances
(1) This section applies if:
(a) an employee employed by an employer cannot usefully be employed during a period because of a particular circumstance; and
(b) that circumstance is:
(i) a strike; or
(ii) a breakdown of machinery; or
(iii) a stoppage of work for any cause for which the employer cannot reasonably be held responsible;
…
(2) If this section applies, the employer:
(a) may stand down the employee during the period referred to in paragraph (1)(a) because of the circumstance referred to in that paragraph; and
(b) if the employer stands down the employee under paragraph (a) of this subsection - may deduct payment for the period during which the employee is stood down.
138 There are some differences between those sub-sections of s 691A and the equivalent provisions of s 524 being subsections (1) and (3) thereof. Section 691A(1) of the WR Act was somewhat broader than s 524(1) of the FW Act in setting out the causal circumstances specified by that provision. Thus, s 524(1)(a) excludes industrial action organised or engaged in by the employer and s 524(1)(b) effectively excludes a breakdown in machinery for which the employer bears reasonable responsibility. In comparison to s 691A of the WR Act, those changes tend to contract the causal circumstances which engage an employer's authority to stand down an employee and thus narrow the operative scope of s 524 as compared to s 691A. However, the provisions in question nevertheless bear a great deal of similarity. Each is focused upon, and its operation is dependent upon, the existence of a period specific to a particular employee in which that employee cannot be usefully employed because of one or other of the causal circumstances specified in the provision, those circumstances being largely the same but not identical for the reasons just given. Whilst the drafting style and structure is somewhat different, there are no material differences between the two provisions other than those previously mentioned. In particular, the language of s 524(3) that an "employer is not required to make payments to the employee for the [stand down] period" is not materially different from the authority that was given by s 691A(2)(b) that an employer "may deduct payment for the period in which the employee is stood down". Each expression conveys that a payment that would otherwise have been payable if the provision had not been engaged, is not payable during the stand down period. Neither formulation addresses the basis for which the payment would otherwise have been payable. On that issue, each formulation is equally unqualified and the nature of the payment that need not be made is left to be inferred from the remainder of the provision.
139 The reasons which I have earlier given for concluding that s 524 of the FW Act is not engaged, in relation to an employee during a period in which the employee is taking authorised leave, apply equally to s 691A of the WR Act. Neither provision provides authority to stand down an employee whilst an employee is in a period of authorised leave or to not make a payment due in respect of that leave.
140 Given the absence of any material distinction between the terms of s 524 and s 691A, if I am right as to those conclusions in relation to s 691A of the WR Act, but wrong as to the same conclusions in relation to s 524, it can only be because of the terms of s 525 of the FW Act which had no counterpart in the WR Act. Section 525 of the FW Act is in the following terms:
Employee not stood down during a period of authorised leave or absence
An employee is not taken to be stood down under subsection 524(1) during a period when the employee:
(a) is taking paid or unpaid leave that is authorised by the employer; or
(b) is otherwise authorised to be absent from his or her employment.
Note: An employee may take paid or unpaid leave (for example, annual leave) during all or part of a period during which the employee would otherwise be stood down under subsection 524(1).
141 To my mind and for the reasons I will shortly develop, s 525 is confirmatory of the operation of s 524 and, specifically, confirmatory of the conclusion that an employee in a period of authorised leave does not engage the terms of s 524. On the basis that my construction of s 691A of the WR Act is correct, as I believe it to be, it is I think untenable to construe s 525 as intended to bring about significant legislative reform by, for the first time, extending the operative reach of the statutory stand down provision to an employee on authorised leave. No competent draftsperson would have approached the task of bringing about such a reform by essentially repeating the text of s 691A and then adding the text of s 525. Nor is any such significant reform heralded or even faintly suggested by any of the relevant extrinsic material, including the particularly detailed Explanatory Memorandum which accompanied the Fair Work Bill 2008 ("Explanatory Memorandum").
142 Qantas' case is premised upon s 525 being a "statutory deeming provision which creates a fiction", the fiction being that an employee who is stood down under s 524(1) is not taken to be stood down during a period in which the employee is taking leave of the kind contemplated by s 525(a) or an authorised absence of the kind contemplated by s 525(b). The use of the phrase "is not taken to be" is the basis for the contention that the provision is a deeming provision which operates upon a fiction, although Qantas acknowledged that the intended deeming was couched in awkward language because the expression "is not taken to be" suggests that s 525 is reversing a fiction, rather than reversing the reality provided for in s 524. Accordingly, Qantas contended that the expression "is not taken to be stood down" was intended to mean "taken not to be stood down". On that contention, the assumed reality is that s 524(1) does authorise an employee to be stood down during a period when the employee is on authorised absence or leave.
143 The first difficulty with the construction of s 525 for which Qantas contends is that the assumed reality as to the operation of s 524 is not the reality at all for the reasons already addressed. The reality being that s 524 does not engage an employee during a period when the employee is on authorised absence or leave, suggests that what s 525 must be intended to do is to confirm the reality provided for by s 524 rather than reverse it. That suggests that the phrase "is not taken to be stood down" was simply intended to mean "not stood down". Notably and in respect of s 525, the Explanatory Memorandum (at [2884]), used the expressions "is not taken to be stood down" and "is not stood down" interchangeably (emphasis added):
If an employee is authorised by the employer to take leave (paid or unpaid) or to be absent from employment then the employee is not taken to be stood down under subclause 524(1). Also, if an employee is entitled to be absent from work, for example on a public holiday, the employee is not stood down.
144 The Note to s 525 serves to confirm that the provision is dealing with an employee not stood down under s 524 as a matter of fact rather than fiction. It refers to the employee addressed by s 525 as an employee who "would otherwise be stood down under subsection 524(1)" if the employee was not at that time taking leave. The Note confirms the construction of s 524, which I prefer, that during the period of leave an employee is not stood down.
145 Although there is some initial attraction to the idea that the words "taken to be" invoke some attempt to create a fiction, on closer examination including by reference to context and purpose, it becomes clear that in truth, there is nothing in the text of s 525 which purports to alter the operation of s 524. That realisation demonstrates again the wisdom of the observation that "the context, general purpose and policy of the provision and its consistency and fairness are surer guides to meaning than the logic of the construction of the provision" (Bay Street Appeal at [4]).
146 The construction advanced by Qantas would characterise the function of s 525 as carving out an exception from the rule provided by s 524 that an employee in a period of leave is able to be stood down in accordance with that provision. But that is clearly not the rule and it is clear that s 525 does not seek to make it so. The rule under s 524 is that employees on authorised absence or leave are excepted from its operation. Section 525 must be understood as explaining or confirming that exception. It cannot be understood as creating an exception when the exception already exists.
147 To adopt the language of Kiefel CJ and Keane J in R v A2 [2019] HCA 35 at [51], s 525 "is properly read as a clarification inserted for the avoidance of doubt, and not as an exception to [s 524]". The provision achieves that objective by setting out expressly the exception impliedly made by s 524 that an employee in a period of authorised absence or leave is not an employee in a period of the kind specified by s 524(1) and is therefore not capable of being stood down. Another example of a provision inserted for the avoidance of doubt rather than to qualify the operation of a related provision, is found in Taylor v Attorney General (Commonwealth) [2019] HCA 30 (see at [44] per Kiefel CJ, Bell, Gageler and Keane JJ).
148 Furthermore, the scope of the exception being confirmed (rather than being made) by s 525, is not to be construed as Qantas would have it construed. The exception, as implicitly made by s 524, extends to all forms of authorised absence or leave. No qualification to that exception and, in particular, no qualification in respect of either personal/carer's leave or compassionate leave is discernible from the text, context or purpose of that provision. As a reflection of the exception made by s 524, s 525 cannot be construed as qualifying that which it is intended to mirror.
149 That being so also demonstrates that there was no material distinction intended by the use of the word "leave" in s 525(a) and the reference to an authorised absence in s 525(b). As earlier indicated, Qantas' case was fundamentally constructed upon that being a distinction of significance.
150 As a matter of ordinary language, leave is an authorised absence and, as the appellant unions submitted, the FW Act is prone to use the terms interchangeably: see for example s 22(2), which defines 'service'; s 62(4), which treats any absence or leave as hours worked; s 130(1), which prohibits taking leave while receiving workers' compensation payments; s 352, which prohibits dismissal by reason of an absence but which clearly has in mind personal leave; and the heading to Div 8 of Pt 2-2 "Community service leave" followed by s 108 which refers to the activities dealt with by that Division as an entitlement to be absent.
151 The distinction made between paras (a) and (b) of s 525 is not made by reference to the nature of the absence, but it is made by reference to the source of the authority for the absence. Paragraph (a) is addressing an authorised absence sourced in the consent of the employer, whilst para (b) is addressing an authorised absence as of right, that is an absence authorised by an entitlement to be absent conferred by statute, by an industrial instrument, by contract or otherwise. To my mind that distinction has been made to emphasise that, as well as leave available as of right, leave may be taken even where there is no entitlement to take leave providing that the employer has consented. Thus, for instance, annual leave may be taken in advance of an employee's entitlement to take leave, if authorised by the employer. The taking of leave by an employee during a period where the employee would not have been able to be usefully employed is likely to serve the interests of both the employee and the employer. That the provision has sought to emphasise that all forms of leave, however authorised, are available to be taken is not, in the context of the circumstances with which s 525 deals, surprising.
152 Further, the points made by Qantas in support of the distinction it sought to make were unconvincing. First, Qantas' reliance on the purported need for employer authorisation to take annual leave was misguided. That the time annual leave is taken is to be a period agreed between the employee and the employer, where the employee's request is not to be unreasonably refused (s 88 of the FW Act), is not a basis for characterising annual leave as an entitlement "authorised" by an employer. Annual leave may be so characterised where it is conferred not by the statute but by the employer's consent, such as annual leave provided in advance. However, all manner of leave may be so characterised where conferred by the employer including PC&C leave which Qantas sought to say was not a kind of leave contemplated by s 525 at all. Unpaid or paid personal leave can be authorised by an employer and often is, especially where an employee suffers a serious injury but has exhausted the statutory entitlement to paid personal leave. That observation serves to confirm that the distinction drawn between paragraphs (a) and (b) of s 525 is a distinction based on the source of the authorisation for leave and not on its nature.
153 Nor is it likely that the purpose of the distinction between paras (a) and (b) is directed to limiting the leave that may be taken by employees to that which their employer is prepared to countenance, as a means of diminishing the financial burden upon the employer. That contention is founded upon the incorrect proposition (for the reasons earlier given) that a purpose of a stand down provision is to relieve an employer of that burden.
154 Third, if the distinction sought to be made by Qantas was intended, whether or not a form of absence was within the scope of para (b) would depend upon whether the statute, industrial instrument or contract conferring the entitlement describes it as an authorised absence or alternatively as authorised leave. It is, I think, untenable to contend, in circumstances where every kind of authorised absence from work is capable of being described as leave, that Parliament intended that access to the entitlement would depend upon the descriptor chosen by the instrument which conferred it. Nor is it likely that Parliament intended that the distinction between leave and absence should depend upon the substance of the entitlement irrespective of how it is described. What is the difference in substance between an authorised absence and leave? If there is a difference, it is not a difference that can be clearly articulated or easily discerned.
155 To avoid the force of the argument made in response by the appellant unions, that the descriptor chosen for the entitlement by the instrument conferring it could not have been intended to dictate whether or not the entitlement was accessible, Qantas contended that paras (a) and (b) were only dealing with entitlements conferred by the FW Act. But s 525 cannot be construed as confined to FW Act entitlements when s 524 is obviously not so confined. To so construe s 525, would require that the "payments" that an employer is authorised not to make by s 524(3) be limited to payments required by the FW Act and would exclude payments required by any other source including any applicable industrial instrument and the contract of employment. There is no discernible basis for confining either s 524 or s 525 to entitlements conferred by the FW Act.
156 Further, if para (b) was intended to be confined to entitlements described by the FW Act as authorised absences, in circumstances where there are but three provisions that so describe the entitlement, it would be surprising that a general descriptor was used in s 525(b) rather than specific reference made to the provisions actually in sight.
157 If, despite my own view, the distinction sought to be drawn by Qantas between the subject matter dealt with by paras (a) and (b) of s 525 is open, it is I think a distinction that is only open by reason of the logic of the construction of the provision. Again, a surer guide to what the provision intends, as the authorities have so often emphasised, is the "context, general purpose and policy of the provision and its consistency and fairness" (see above at [110]). Each of those considerations have already been addressed and are decisive. In particular, Qantas' reliance upon s 525 cannot stand in light of the fact that whilst in a period of leave an employee is not stood down pursuant to the authority given by s 524(1) and that, consequently, there is no authority given by s 524(3) for the leave payment due to the employee being withheld.
158 Qantas asserted that its conclusion that an employee who has been stood down in accordance with s 524(1) cannot generate an entitlement to PC&C leave is consistent with the operation of the statutory provisions which confer that leave. It is not clear to me why any such consistency needs to be demonstrated. If an employee in a period of PC&C leave can be stood down in accordance with s 524(1), then s 524(3) would negate the requirement made by s 99 of the FW Act that whilst an employee (other than a casual employee) "takes a period of paid personal/carer's leave, the employer must pay the employee at the employee's base rate of pay for the employee's ordinary hours of work in the period". The same would apply in relation to compassionate leave where s 106 of the FW Act provides that if an employee (other than a casual employee) "takes a period of compassionate leave, the employer must pay the employee at the employee's base rate of pay for the employee's ordinary hours of work in the period". On the premise that an employee on such leave is stood down in accordance with s 524(1) and that consequently s 524(3) is engaged, there is no need to demonstrate that s 99 and s 106 would not in any event have been engaged because even if those provisions were engaged they are overridden by s 524(3).
159 The contention was really put for the broader purpose of demonstrating that, irrespective of whether an employee is stood down in accordance with s 524(1), an employee who is stood down (as Qantas put it) "cannot generate any entitlement" to paid PC&C leave by reason of the operation of s 99 and s 106.
160 Whether put for that broader purpose or to demonstrate consistency, the contention is without merit.
161 Qantas relied upon the terms of s 99 and s 106 and in particular the expression "ordinary hours of work in the period" to contend that for an employee stood down, there can be no ordinary hours of work because there is no work at all and therefore no entitlement to be paid is generated under s 99 or s 106. The submission involves a fundamental misconception of what is meant by the expression "ordinary hours of work". It proceeds on the basis that "ordinary hours of work" means the hours in which an employee has work to do.
162 That definition of "ordinary hours of work" would turn the long-standing meaning of a well-worn industrial phrase of great importance, on its head.
163 As Allsop CJ (with whom Rangiah J agreed) said at [39] of Bluescope Steel (AIS) Pty Ltd v Australian Workers' Union (2019) 270 FCR 359, "[t]he notion of standard or ordinary working hours has long had a place in the industrial relations landscape of Australia". With respect to his Honour, Allsop CJ correctly observed that in the context of the payment of salaries and wages in the workplace:
…the word "ordinary" and the phrase "ordinary hours" have assumed different meanings depending on context and circumstance. There are circumstances and contexts where the word and phrase can be seen to refer to regular, normal, customary or usual hours; and there are circumstances or contexts where the word and phrase can be seen to refer to the hours of work referred to in applicable industrial instruments as standard hours to be paid at ordinary rates, as opposed to additional hours (even if required, usual, regular, normal or customary) and paid at a special or higher rate. As such, the word and phrase can be seen to reflect the long-recognised distinction between ordinary hours of work and overtime: cf Thompson v Roche Bros Pty Ltd [2004] WASCA 110 at [31].
164 As the Chief Justice went on to observe at [40] the meaning of "ordinary hours of work" is given by s 20 of the FW Act in relation to award/agreement free employees. For those employees, s 20(1) relevantly provides that "[t]he ordinary hours of work of an award/agreement free employee are the hours agreed by the employee and his or her national system employer as the employee's ordinary hours of work".
165 At [41] the Chief Justice then referred to the Explanatory Memorandum in which he observed "the importance of ordinary hours of work to the National Employment Standards was explained". At [234] and [235] the Explanatory Memorandum said this:
There are a number of concepts that are used regularly in Part 2-2. These are explained below.
Various employee entitlements under the NES are based on the employee's ordinary hours of work.
• The ordinary hours of work for an employee to whom a modern award applies will be the ordinary hours set out in the modern award (all awards are required to provide ordinary hours, or a means of determining ordinary hours) (see clause 147).
• The ordinary hours of work for an employee to whom an enterprise agreement applies will be the hours identified in the enterprise agreement. (An agreement should identify ordinary hours, or a means of determining ordinary hours, in order for the agreement to pass the better off overall test.)
• The ordinary hours of work for an award/agreement free employee (as defined in clause 12) are calculated in the manner set out in clause 20.
166 Sections 99 and 106 of the FW Act use the expression "ordinary hours of work" so as to identify the extent of the employee's entitlement to be paid wages or salary whilst in a period of leave. The payment for the period in which leave is taken is to be calculated by reference to "the employee's base rate of pay for the employee's ordinary hours of work". The distinction there sought to be made by the use of the expression "ordinary hours of work" is between ordinary or standard hours of work and overtime hours and, as stated in the Explanatory Memorandum, for employees like those here in question who are covered by an enterprise agreement "[t]he ordinary hours of work for an employee to whom an enterprise agreement applies will be the hours identified in the enterprise agreement". For example, the Qantas Airways Limited (AWU, AMWU, CEPU) Enterprise Agreement 10 ("EA") specifies in cl 25 the ordinary hours of work for both shift workers and day workers. For shift work, cl 25.1.1 provides:
The ordinary hours of work shall be an average of 38 hours per week to be worked on the basis of 152 ordinary hours within a work cycle not exceeding 28 consecutive days to be worked (in the case of full time day workers) at eight hours per day nineteen days per cycle.
167 For day work (and subject to various provisos set out in the clause) cl 25.1.2 relevantly provides:
The ordinary hours for day workers shall not exceed 40 per week, worked on five days of eight hours each worked continuously between 0600 and 1800, Monday to Friday.
168 An employee's "ordinary hours of work" is an expression of the standard number of non-overtime hours the employee may be required to work and the spread of hours over a week or a longer cycle during which work may be required. An employee's "ordinary hours of work" are fixed until altered. They may be fixed by the contract, the award or the relevant enterprise agreement. An employee's "ordinary hours of work" do not depend upon work being available for the employee to perform. They are not varied by an absence of useful work for the employee to perform. An employee's "ordinary hours of work" are the same irrespective of how many hours of work are performed or are available to be performed. Whether an employee is in a period of leave or not, an employee's "ordinary hours of work" are the same.
169 Qantas relied on the observations made by various members of the High Court in Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2020] HCA 29 which have been conveniently set out in the reasons of Rares and Colvin JJ. To my mind, those observations were made on the basis of the expression "ordinary hours of work" having the long-standing meaning to which I have referred. So understood, those observations provide no support for Qantas' contention.
170 It may be accepted that it is possible for a provision providing an entitlement to either personal/carer's leave or compassionate leave to impose a condition upon that entitlement, being that the entitlement is not available during a period when the employee could not have been usefully employed for a reason other than the employee's unavailability because the employee was absent on leave. As entitlements to leave can be conferred by an industrial instrument or a contract of employment as well as the FW Act, any of those sources of the entitlement could impose such a condition. However, as both personal/carer's leave and compassionate leave are provided for by the FW Act as minimum standards which form part of the "National Employment Standards", neither a contract, an award or an enterprise agreement can derogate from those entitlements by imposing conditions which would limit access to them (see s 55(1) and s 56 of the FW Act).
171 Section 97 of the FW Act sets out the conditions that govern the taking of personal/carer's leave. There are essentially two conditions. Section 97 provides that an "employee may take paid personal/carer's leave if the leave is taken…(a) because the employee is not fit for work…or…(b) to provide care or support to a member of the employee's immediate family…". Neither condition is qualified by any requirement that during the period in which leave is to be taken there be useful work for the employee to perform.
172 Section 104 sets out the "permissible occasions" when an employee may take compassionate leave. The occasions specified are in each case occasions where either a member of the employee's immediate family or a member of the employee's household contracts or develops an illness or sustains an injury that poses a serious threat to that person's life or, alternatively, that person dies. The "permissible occasions" are not qualified by any requirement that during the period in which leave is to be taken there be useful work for the employee to perform.
173 There is, however, one qualification that is implicit. The entitlement to either personal/carer's leave or to compassionate leave only applies in respect of a day or during a period in which the employee would ordinarily have been performing work. Neither entitlement falls on a day when the employee is not ordinarily working or, more precisely, at a time otherwise than during the employee's ordinary hours of work. That implication flows from the fact that the entitlement is an entitlement to leave and, of its nature, leave is an entitlement of an employee to be absent from work during a period in which the employee is ordinarily rostered to work. The same implication is equally applicable to every kind of entitlement to leave.
174 But Qantas contends for a broader implication. Qantas contends for an implicit condition that the entitlement to leave is limited to a time when the employee would have been ordinarily required to work but only if, during that time, the employee could have been usefully employed. As discussed no such implication is available to be drawn from s 99 or from s 106. It needs to be further stated, however, that if such a condition is implicit in relation to PC&C leave there is no reason for the same implication not to be equally applicable across all forms of leave. Further, if such a condition is implicit there is nothing to confine its operation to a situation where the employee cannot be usefully employed by reason of one or other of the circumstances specified by s 524(1). The corollary of this contention is that there is no entitlement to any kind of paid leave whatsoever, whenever an employee cannot be usefully employed for any reason whatsoever. That notion is startling in its reach and effect yet Qantas cannot point to a single historical example, whether by reference to entitlements conferred by the FW Act, predecessor federal legislation, state-based legislation (remembering that long service leave is usually a state-based entitlement) or an award or enterprise agreement, in which an employee's entitlement to leave has been held to be conditioned by the limitation that, during the period of the leave, the employee must have been able to have been usefully employed.
175 There are no such examples because the entire foundation for the contention is without any merit. Employee entitlements to paid leave are not dependent upon an employer having useful work for the employee to do during the period of the leave just as employee entitlements to be paid wages when not on leave are not dependent upon the employer having useful work for the employee to do, unless, of course, a provision such as s 524(3) is engaged. That all goes to demonstrate that Qantas' case stands or falls on s 524 and not upon the operation of either ss 96-103 dealing with personal/carer's leave or ss 104-106 dealing with compassionate leave.
176 Nor is there anything particularly incongruous or paradoxical about some employees being entitled to paid leave whilst other employees are stood down without pay. The timing of and extent to which leave such as PC&C leave is taken is random. It is in the nature of such leave that there will be variable rather than equal access to leave of that kind across a range of employees of the one employer. Further, once taken and irrespective of when taken, the entitlement diminishes and, unlike the employee lawfully stood down, the employee who takes PC&C leave pays a price for utilising that entitlement. Furthermore, the utilisation of these entitlements when there would be no useful work for the employee rather than when there is useful work for that employee to do, tends to better serve the interests of the employer. When those matters are put together with the obvious and significant disruption and disadvantage that an employee would be faced with if denied PC&C leave, particularly an employee already on personal leave who would then likely be more reliant on the certainty of being paid than at most other times, there is no discernible policy-based imperative that supports Qantas' case. To the contrary, particularly given the far-ranging effects that would logically follow from the acceptance of Qantas' case across all manner of leave entitlements, there are strong reasons for thinking that what appears to have been the long-standing industrial practice in which stand down provisions have not impacted upon employee entitlements to leave, is based upon cogent policy.
177 For all those reasons, with great respect to the primary judge, his Honour erred in dismissing the application for a declaration made by the appellant unions. Although I would not make a declaration in the form sought by the appellant unions before the primary judge, a declaration should be made to the effect that Qantas is not authorised by s 524 or s 525 of the FW Act to stand down and withhold the payment due to an employee during a period in which the employee is taking personal/carer's leave or compassionate leave.