Typographical errors at [32], [36], [38], [40] and [50] amended.

Fair Work Act 2009

Section 789GV - Application to deal with a dispute in relation to JobKeeper

Application to deal with a dispute in relation to JobKeeper

[1] On 5 May 2020 Mathew Mazzitelli applied to the Commission to deal with a JobKeeper dispute under Part 6-4C of the Fair Work Act 2009 (FW Act). The application concerns what Mr Mazzitelli considers to be an incorrect application of the JobKeeper payment rules as they apply to monthly paid but stood down employees.

[2] On 6 May 2020, consistent with a direction I issued seeking a response, the responding employer Qantas Airways Limited (Qantas) opposed the application and raised a jurisdictional issue.

[3] I heard the matter in conference (by phone) on 7 May 2020. The conference was audio recorded.

[4] The primary purpose of the conference was to explore the potential for a conciliated resolution of the application. Although both Mr Mazzitelli and Qantas held competing views on both jurisdiction and on merit, each constructively outlined their respective positions on both issues.

[5] No settlement was reached.

[6] Qantas then sought determination of the jurisdictional issue before further conciliation or hearing on the merits.

[7] After hearing the parties, I formed the view that in light of the jurisdictional issue raised there was no reasonable prospect of settlement in advance of the jurisdictional issue being determined.

[8] With the agreement of both Mr Mazzitelli and Qantas and in the same conference, I moved directly to determination of the jurisdictional issue. Qantas and Mr Mazzitelli put further oral submissions on jurisdiction after which I reserved my decision.

[9] I indicated to the parties that I would deliver my decision on jurisdiction by no later than 12 noon 8 May 2020 and that, in view of the need to deal with Part 6-4C applications promptly, I would provisionally relist the matter for 4.00pm (ACST) 8 May 2020 whereupon I would further deal with the merits should there be jurisdiction to do so. If I were to find no jurisdiction, then that listing would lapse.

[10] The relevant facts are simply stated.

[11] Mr Mazzitelli is employed by Qantas as a Planning and Engagement Manager.

[12] Mr Mazzitelli is paid on a monthly pay cycle; on the 15th of each month.

[13] Due to the impact of COVID-19 on its business, in March 2020 Qantas stood down thousands of employees, including Mr Mazzitelli. Mr Mazzitelli was stood down by letter and notice dated 27 March 2020. The letter provided:

"During the stand down you remain employed but you are not required to attend for work. You will also not be paid for the period of your stand down. However you may elect to take your entitlement to paid annual leave and long service leave during your stand down period."

Under section 524 of the Fair Work Act 2009 (Cth) you are notified that you will be stood down from any work, shift or duty commencing on or after 12.01AM on 6 April 2020 as you cannot be usefully employed.

The stand down will continue until 31 May 2020 but will be continually under review. If circumstances change, you will be notified of a time and date for you to return to work. During the period of the stand down you will not be paid and you should not attend for work."

[15] Mr Mazzitelli worked until 6 April 2020. Thereafter he did not attend work as he was stood down.

[16] JobKeeper is a Commonwealth programme whereby the Commonwealth provides, for a limited period[1] and on account of the economic impact of COVID-19 on the economy, a wage subsidy of $1,500 per fortnight to eligible employers with respect to eligible employees. Eligible employers are required to make fortnightly payments of wages to such employees in at least the sum of $1,500[2] and after having done so, the Commonwealth reimburses the employer the wage subsidy.

[17] Under the JobKeeper payment rules[3], the first JobKeeper fortnight is the period during the two weeks from 30 March 2020 to 12 April 2020. The second JobKeeper fortnight is from 13 April 2020 to 26 April 2020[4].

[18] Legislation giving effect to JobKeeper passed the Commonwealth parliament on 8 April 2020 and received Royal Assent and commenced on 9 April 2020[5].

[19] The JobKeeper legislation made complementary amendments to the FW Act[6].

[20] JobKeeper (including eligibility of employers and employees for the programme) is administered by the Australian Taxation Office (ATO).

[21] Following commencement of JobKeeper, Qantas expressed interest in and became certified as an eligible employer.

[22] Mr Mazzitelli is an eligible employee.

[23] On 15 April 2020 Qantas made two payments to Mr Mazzitelli:

• $2,352.30 (gross) for work performed in the month of April 2020 (that is, work up to the commencement of Mr Mazzitelli's stand down on 6 April 2020); and

• $647.70 (gross) as a JobKeeper "top up".

[24] Mr Mazzitelli believes that the JobKeeper "top up" paid to him by Qantas on 15 April 2020 should have been in the sum of $1,500 (gross) being an amount payable for the second JobKeeper fortnight for the month of April 2020. On that basis he says he has been underpaid $852.30.

[25] Mr Mazzitelli believes that Qantas has incorrectly applied the JobKeeper legislation and the payment rules. He believes that because he is paid monthly, that he is disadvantaged compared to those Qantas employees who are paid fortnightly and who he says received the full $1,500 for the second payment fortnight in April 2020. He states his dispute in the following terms[7]:

"According to the ATO I should be receiving the JobKeeper payment for each fortnight."

[26] In response, Qantas contend that it has correctly applied the JobKeeper legislation and the payment rules. It claims that those rules, as administered by the ATO, require and permit an employer to apply payments to monthly paid employees across two fortnights, and to apply wages earned (if any) across those fortnights in a reasonable manner. It says that Mr Mazzitelli received $3,000 (gross) in total across the two fortnights in April 2020, including payment for work done plus a JobKeeper top up to this amount. It denies that he is entitled to more than this sum.

[27] Qantas submit that the Commission does not have jurisdiction to deal with or determine Mr Mazzitelli's dispute. There are three grounds on which Qantas make the jurisdictional challenge[8]:

1. that Mr Mazzitelli's dispute it is not a dispute about the operation of Part 6-4C of the FW Act;

2. that the remedy sought by Mr Mazzitelli would require the exercise of judicial power;

3. that the remedy sought by Mr Mazzitelli is in the nature of an underpayment claim which, according to the Commission's JobKeeper benchbook[9], is not within its jurisdiction.

[28] I now deal with the jurisdictional issue.

[29] Part 6-4C of the FW Act was introduced in conjunction with the legislative changes accompanying the JobKeeper programme, and commenced from 9 April 2020.

[30] Part 6-4C allows employers to give certain directions to employees (JobKeeper enabling directions) and make certain requests of them. Part 6-4C also requires the Commission to deal with applications concerning certain JobKeeper disputes.

[31] Section 789GV(1) provides:

"789GV 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 a 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 a dispute only on application by any of the following:

(a) an order that the FWC considers desirable to give effect to a jobkeeper enabling direction;

(b) an order setting aside a jobkeeper enabling direction;

(i) setting aside a jobkeeper enabling direction; and

(ii) substituting a different jobkeeper enabling direction;

(d) any other order that the FWC considers appropriate.

(5) The FWC must not make an order under paragraph (4)(a) or (c) on or after 28 September 2020.

(6) An order made by the FWC under paragraph (4)(a) ceases to have effect at the start of 28 September 2020.

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

[32] The first jurisdictional question which arises is whether Mr Mazzitelli's application is "a dispute about the operation of this Part" within the meaning of section 789GV(1).

[33] The first step to determining this question is to characterise the dispute.

[34] Mr Mazzitelli says that the dispute is about the proper interpretation of Part 6-4C and in particular the Employer Payment Obligations in sections 789GD and 789GDA of the FW Act.

[35] Qantas submit that, properly characterised, the dispute is about "the proper interpretation of ss 789GD and 789GDA and r 10 of the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020, which is a matter over which the Commission does not have jurisdiction."

[36] I agree with these characterisations but not Qantas's conclusion. The dispute is about the Employer Payment Obligations in sections 789GD and 789GDA and, to the extent relevant to the application of those provisions, the Payments and Benefits Rules.

[37] Section 789GA summarises what Part 6-4C concerns itself with:

The purpose of this Part is to assist employers who qualify for the jobkeeper scheme to deal with the economic impact of the Coronavirus known as COVID-19.

This Part authorises an employer who qualifies for the jobkeeper scheme to give a jobkeeper enabling stand down direction to an employee (including to reduce hours of work).

This Part authorises an employer who qualifies for the jobkeeper scheme to give a direction to an employee about:

This Part authorises an employer who qualifies for the jobkeeper scheme and an employee to make an agreement in relation to:

(a) the days or times when the employee is to perform work; or

(b) the employee taking annual leave, including at half pay.

This Part provides that an employer who qualifies for the jobkeeper scheme must consult an employee (or a representative of the employee) before giving a direction.

(a) a direction given by an employer who qualifies for the jobkeeper scheme to an employee does not apply to the employee if the direction is unreasonable in all of the circumstances; and

(b) a direction given by an employer who qualifies for the jobkeeper scheme to an employee in relation to the duties to be performed by the employee, or the location of the employee's work, does not apply to the employee unless the employer reasonably believes the direction is necessary to continue the employment of one or more employees of the employer.

This Part provides for other safeguards relating to directions given by employers who qualify for the jobkeeper scheme, including a rule that this Part will at all times operate subject to listed laws.

This Part provides that the FWC may deal with a dispute about the operation of this Part.

[38] Whilst the primary focus of Part 6-4C is to provide scope for an eligible employer to issue a JobKeeper enabling direction (relating to stand down, duties of employees or location of work)[10] this is not its exclusive focus. The Part also contains provisions unrelated to a JobKeeper enabling direction: for example agreements between JobKeeper eligible employers and employees over location of work, days of work, annual leave and rights to secondary employment[11].

[39] Relevantly for the purposes of this matter, those provisions of Part 6-4C unrelated to a JobKeeper enabling direction include Employer Payment Obligations and in particular the wage condition and the minimum payment guarantee under sections 789GD and 789GDA. These sections provide:

**"**789GD Obligation of employer to satisfy the wage condition

(a) an employer qualifies for the jobkeeper scheme; and

(b) the employer would be entitled to jobkeeper payment for an employee for a fortnight if (among other things) the employer satisfied the wage condition in respect of the employee for the fortnight;

the employer must ensure that the wage condition has been satisfied in respect of the employee by the end of the fortnight.

Note: 1 This section is a civil remedy provision (see Part 4-1).

Note 2: Under the jobkeeper payment rules, a jobkeeper payment is a payment to an employer for a particular employee for a fortnight.

(1) For the purposes of this Part, the minimum payment guarantee consists of the rule set out in subsection (2).

(2) If a jobkeeper payment is payable to an employer for an employee of the employer for a fortnight, the employer must ensure that the total amount payable to the employee in respect of the fortnight is not less than the greater of the following:

(a) the amount of jobkeeper payment payable to the employer for the employee for the fortnight;

(b) the amounts payable to the employee in relation to the performance of work during the fortnight.

Note 1: This subsection is a civil remedy provision (see Part 4-1).

Note 2: Amounts referred to in this subsection (other than paragraph (a)) include the following, if they become payable in respect of the fortnight:

[40] Mr Mazzitelli was not stood down under a JobKeeper enabling stand down (section 789GDC). He was stood down under general stand down provisions available to employers under section 524 of the FW Act. Indeed, at the time Mr Mazzitelli was notified of his stand down and at the time his stand down took effect, the JobKeeper programme and legislation had not commenced.

[41] However, given that sections 789GD and 789GDA are not contingent on an employee having been stood down under a JobKeeper enabling direction, I do not consider either of these factors to be a basis to conclude that Mr Mazzitelli's application is not "a dispute about the operation" of Part 6-4C.

[42] Mr Mazzitelli was, at the time of making his application an eligible employee and his employer was an eligible employer. He was in receipt of a top up payment by his employer under the JobKeeper scheme. The payment fortnights that are the subject of his dispute are payment fortnights related directly to his employer's application of the Payments and Benefits Rules and the employer's obligation under Part 6-4C to meet the wage condition and the minimum wage guarantee.

[43] For these reasons I conclude that Mr Mazzitelli's dispute is a dispute about the operation of Part 6-4C and thereby within the Commission's jurisdiction. I reject the first jurisdictional ground advanced by Qantas.

[44] The second and third jurisdictional grounds advanced by Qantas are conveniently dealt with together.

[45] I do not accept the proposition that dealing with the dispute as notified by Mr Mazzitelli and as properly characterised (being a dispute about the wage condition and the minimum payment obligation under Part 6-4C) requires the Commission to exercise judicial power.

[46] The exercise of judicial power, which (under the Australian Constitution) is a power reserved for courts (not the Commission) involves the final determination of lawful rights and obligations and orders related thereto. This would include, for example, a determination that an employer is in breach of the law for having underpaid an employee and a consequential order requiring monies to be paid.

[47] Determinations and orders of this type by the Commission would be an impermissible exercise of judicial power. The Commission's JobKeeper benchbook correctly identifies that the Commission "cannot generally assist with claims for underpayment of wages and entitlements, including payments under the JobKeeper scheme"[12]. This is simply a statement of the legal position that underpayment claims are not within the Commission's jurisdiction.

[48] In any event, the JobKeeper Benchbook is a guide and its language does not substitute for the law. The Benchbook makes this clear[13].

[49] The proposition that dealing with disputes over the JobKeeper wage condition or the minimum wage guarantee generally or in the specific circumstances of Mr Mazzitelli's application necessarily involves the exercise of judicial power is rejected. Such a proposition would come close to rendering nugatory the capacity of the Commission to deal with disputes concerning sections 789GD and 789GDA. The legislature has clearly intended that not be the case. Whilst it is so that decisions and orders in the nature of the exercise of judicial power would not be permissible when exercising jurisdiction under Part 6-4C, dealing with a dispute, whether by conciliation or arbitration and whether by making recommendations, decisions or even orders, is capable of being undertaken without impermissibly exercising judicial power.

[50] Mr Mazzitelli's application does indicate that he "would like to know whether I am entitled" to a higher payment with respect to the second JobKeeper fortnight in April 2020. Whilst the final determination of lawful rights are matters for the courts not the Commission, with respect to Mr Mazzitelli's application, as well as applications generally, the Commission is not limited to the relief sought or the specific terms of the relief sought. Mr Mazzitelli sought that the payment practice of his employer be reviewed against the Payment and Benefit Rules. Those rules centrally raise matters concerning the practices of Qantas in applying its wage condition and minimum payment guarantee obligation under Part 6-4C.

[51] For these reasons I reject the second and third grounds of jurisdictional challenge advanced by Qantas.

[52] I conclude that the Commission has jurisdiction to deal with the dispute as notified by Mr Mazzitelli.

[53] The provisional listing of this matter scheduled for 4.00pm today will proceed. At that time I will further conciliate the merits of Mr Mazzitelli's dispute. Should conciliation not be successful and arbitration of the merits be required, arrangements will be put in place for that to occur. Arbitration will not occur at today's further proceedings but will be conducted promptly if needed.

[3] Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (the Payments and Benefits Rules)

[4] JobKeeper fortnights are defined in s.6(5) of the Payment and Benefit Rules

[5] Coronavirus Economic Response Package (Payments and Benefits) Act 2020 (the Payments and Benefits Act)

[6] Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020

[8] Submission, 6 May 2020 paragraphs 2 to 5

[11] Sections 789GF, 789GG, 789GJ and 789GV

[12] "The Commission can deal with disputes under the dispute resolution procedure in an enterprise agreement or modern award (see ss.738-739 of the Fair Work Act), but the Commission cannot generally assist with claims for underpayment of wages and entitlements, including payments under the jobkeeper scheme." JobKeeper Benchbook Part 6 page 27/55

[13] "This benchbook should be used as a general guide only. It is not intended to be used as an authority in support of a case at hearing." Disclaimer page 1/55

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