Fair Work Act 2009

s.604 - Appeal of decisions

Appeal against decision [2020] FWC 2413 of Deputy President Anderson at Adelaide on 8 May 2020 in matter number C2020/3189.

[1] Qantas Airways Limited (Qantas) has lodged an appeal, for which permission to appeal is required, against a decision issued by Deputy President Anderson on 8 May 2020[1] (decision). In the decision, the Deputy President rejected a jurisdictional challenge made by Qantas to the arbitration of an application made by Mr Matthew Mazzitelli pursuant to s 789GV(3) of the Fair Work Act 2009 (FW Act) and determined that he would make arrangements for the application to be arbitrated should further conciliation not be successful in achieving a resolution of the dispute which was the subject of the application. Qantas contends that permission to appeal should be granted, the appeal upheld and the decision quashed because, in summary, the Deputy President erred in a number of respects in rejecting Qantas' jurisdictional objection and denied Qantas procedural fairness.

[2] The Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020 amended the FW Act by introducing a new Part 6-4C, Coronavirus economic response. Section 789GB provides that the object of the Part is, in summary, to make temporary changes to assist the Australian people to keep their jobs and maintain their connection to their employers, during the "unprecedented economic downturn and work restrictions arising from: (i) the COVID-19 pandemic; and (ii) government initiatives to slow the transmission of COVID-19"; to help sustain the viability of Australian businesses; to continue the employment of employees; to ensure the continued operation of health and safety laws during the pandemic; and to help ensure, where reasonably possible, that employees remain productively employed during the pandemic and continue to contribute to the business of their employer where it is safe and possible for the business to continue operating.

[3] The Part allows qualifying employers to give directions to employees and make certain requests of them. The "jobkeeper enabling directions" which the Part empowers qualifying employers to make fall into three categories:

• a "jobkeeper enabling stand down" under s 789GDC, by which an employee may be required not to work on a day they would usually work, work for a lesser period on a day, or work a reduced number of hours overall (which can be nil);

• a direction under s 789GE that an employee perform other duties that are within the employee's skill and competency and are reasonably within the scope of the employer's business operations; and

• a direction under s 789GF that the employee work at a different place, including the employee's home, provided that it is suitable for the employee's duties and does not require the employee to travel an unreasonable distance.

[4] The making of the directions are subject to requirements relating to reasonableness (s 789GK), necessity for the continuation of the employee's employment (s 789GL), prior notice and consultation (s 789GM), form (s 789GN) and duration (s 789GP). A jobkeeper enabling direction must be complied with by the employee to whom it is directed (s 789GQ).

[5] The requests an employer may make, which must be considered and may not unreasonably be refused by the employee, are:

• a request under s 789GG for the employee to work on days or at times that are different from the employee's ordinary days or times, but which do not reduce the employee's number of hours of work (compared with the employee's ordinary hours); and

• a request under s 789GJ(1) that an employee take paid annual leave, provided the request does not result in the employee having a balance of fewer than two weeks. An employer and employee can also agree to the employee taking twice as much paid annual leave at half pay (s 789GJ(2)).

[6] In order to be authorised under Part 6-4C to make any of the directions or requests referred to, an employer must be a national system employer which qualifies for the jobkeeper scheme and is entitled to a jobkeeper payment in respect of the employee the subject of any such direction or request. The JobKeeper Payment Scheme is a temporary subsidy enacted by the Commonwealth for businesses significantly affected by the COVID-19 pandemic under which such business can apply to receive $1,500 per eligible employee per fortnight to assist them retain employees in employment. Section 789GC provides that qualification for the jobkeeper scheme and entitlement to a jobkeeper payment are as determined by the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Jobkeeper Payment Rules).

[7] Of central relevance to Mr Mazzitelli's application, s 789GD provides (statutory notes omitted):

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.

[8] The expression "wage condition" used in the section is defined in s 789GC as follows:

wage condition means the wage condition set out in the jobkeeper payment rules.

[9] Rule 10(1) of the Jobkeeper Payment Rules provides, in summary, that the "wage condition" is satisfied for a fortnight if the employer pays the employee $1,500 in wages or other employment benefits as prescribed by r 10(2). Rule 10(3) deals with the situation where the employee in question has a usual pay period in excess of a fortnight as follows:

(3) If there is a regular period for which the employer would usually pay employees in relation to the performance of work by the employees, and that period is longer than a fortnight, then in applying this section those payments are to be allocated to a fortnight or fortnights in a reasonable manner.

[10] In addition to s 789GD, s 789GDA requires that, where a jobkeeper payment is payable to an employer for an employee 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 amount of the jobkeeper payment payable to the employer for the fortnight (i.e. $1,500) or the amounts payable to the employee in relation to the performance of work during the fortnight.

[11] Sections 789GD and 789GDA are civil remedy provisions.

[12] Section 789GV empowers the Commission to deal with a dispute about the operation of Part 6-4C in the following terms:

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.

[13] Section 789GW provides that person must not contravene a term of an order of the Commission dealing with a dispute about the operation of Part 6-4C, and is also a civil remedy provision.

Mr Mazzitelli's application and the proceedings before the Deputy President

[14] Mr Mazzitelli is employed by Qantas pursuant to an employment contract under which he is paid a monthly salary. On 27 March 2020 he was informed by Qantas that he would be stood down from work effective from 6 April 2020 pursuant to s 524 of the FW Act as a result of the impact of the COVID-19 pandemic on Qantas' business. He was advised that the standdown would continue until 31 May 2020 but would continually be under review. He was subsequently advised by Qantas that it was eligible to receive the JobKeeper subsidy for his position, and he completed a JobKeeper Employee Nomination Form for that purpose. His dispute with Qantas arose from the first payment he received from Qantas pursuant to the scheme. His application to the Commission, which he lodged on 5 May 2020, explained the issue concerning that payment in the following way:

"...(3) I received my first JobKeeper payment on 15th April. I understand from Qantas that my payment is for the month of April (I am paid monthly on the 15th of each month) and has been split between two payslips (attached for reference), the first payslip covering the first week of April, in which I worked, and the second payslip being a 'JobKeeper Top-up' payment.

(4) I have reviewed my April payslips and JobKeeper Top-up payslip and there appears to be a discrepancy with what I am expecting to be paid versus what I was actually paid. According to the ATO I should be receiving the JobKeeper payment for each fortnight.

(a) For the first JobKeeper fortnight (30th March - 12th April), I worked/earned over $1,500 and therefore was not eligible for the JobKeeper payment or top-up.

(b) For the second JobKeeper fortnight (13th - 26th April), I did not work or earn any income and therefore I should have been paid $1,500 gross under the JobKeeper payment for this fortnight. However, I only received $647.70 gross for this fortnight which is $852.30 less than what I should have been paid for this fortnight ($1,500)."

[15] By way of explanation, the JobKeeper scheme prescribes 13 "JobKeeper fortnights", the first of which is for the period 30 March-12 April 2020 inclusive, and the second of which is 13 April-26 April 2020. Mr Mazzitelli receives a monthly salary which is payable on the 15th of each month. Mr Mazzitelli's position is that he earned $2,352.30 for the period that he worked in April until his standdown took effect, and that is the amount he should have been paid for the first fortnight pursuant to s 789GDA. He then says he earned nothing for the second fortnight, and should have received the jobkeeper payment of $1,500 for the second fortnight. However Qantas - presumably pursuant to r 10(3) of the Jobkeeper Payment Rules - appears to have split Mr Mazzitelli's earnings for April into two fortnightly payments of $1,176.15, and then topped that up for each fortnight to the amount of $1,500. The difference in the two methodologies amounts to $852.30.

[16] In his application, in answer to the question "How do you want the dispute to be solved?", Mr Mazzitelli said:

"I am asking that my issue is reviewed against the ATO Guidelines, and I would like to know whether I am entitled to be paid the additional $852.30 for the second JobKeeper fortnight 13/4-26/4 to bring my JobKeeper payment up to $1,500 for that fortnight.

If I am entitled to receive this payment, I would appreciate support from Fair Work Commission to request my employer pass on my full JobKeeper payment."

[17] After Mr Mazzitelli filed his application, the Deputy President immediately directed Qantas to file a brief written response to the application. Qantas did so on 6 May 2020. In that response Qantas explained its payment method, and contended that the Commission had no jurisdiction to deal with the dispute because it would amount to the exercise of judicial power in that it would be about determining existing rights or liabilities under ss 789GD and 789GDA of the FW Act and r 10 of the Jobkeeper Payment Rules.

[18] The application came on before the Deputy President for an initial conference on 7 May 2020. The following exchange between the Deputy President and Mr Mazzitelli occurred towards the beginning of the conference:

THE DEPUTY PRESIDENT: Yes, so what is it that you're wanting to achieve? Am I correct in saying that I said a moment ago and that is that you're wanting to know whether you are entitled to an additional amount of money for the second fortnight that you were paid a JobKeeper wage subsidy? Is that right?

MR MAZZITELLI: That is partly right. That is correct. In addition I - the part before the payment is I'd like to ensure that the Act is being interpreted correctly,

which would then result in the correct amount of money being paid.[2]

[19] Mr Mazzitelli subsequently said in the conference:

... In addition to this, I'd like to raise that this is not a dispute about underpayment. It is about Qantas's interpretation of subsection 789(g)(d) and 789(e)(a) of the Act as characterised by Rania in point 4 of Qantas's response letter. This has resulted in an underpayment as pointed out in point 7 of my original dispute form.[3]

[20] The Deputy President then heard argument in relation to Qantas' jurisdictional objection, and issued the decision in relation to this the following day.

[21] In the decision, the Deputy President first dealt with the question of whether Mr Mazzitelli's application constituted "a dispute about the operation of this Part" within the meaning of section 789GV(1), and said that the first step in resolving the question was to characterise the dispute. The Deputy President noted Qantas' submission that the dispute, properly characterised, was 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", and said:

"[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."

[22] The Deputy President then concluded as to this issue:

"[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."

[23] The Deputy President then dealt with the contentions advanced by Qantas that the remedy sought by Mr Mazzitelli would require the exercise of judicial power and was not within jurisdiction because it was in the nature of an underpayment claim. The Deputy President did not accept that dealing with the dispute notified by Mr Mazzitelli, as properly characterised, required the Commission to exercise judicial power.[4] The Deputy President accepted that "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" would constitute an exercise of judicial power that would be beyond the power of the Commission,[5] but said:

"[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."

[24] The Deputy President concluded that the Commission had jurisdiction to deal with the dispute notified by Mr Mazzitelli[6] and said:

"[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."

[25] Subsequent to but on the same day as the publication of the decision, the Deputy President conducted the foreshadowed further conciliation conference and, when that proved unsuccessful in resolving the dispute, listed the matter for arbitration and made directions for the filing of materials in connection with the arbitration. However, after Qantas filed its appeal, the Deputy President acceded to an application that the notice of listing and directions be set aside pending the hearing and determination of the appeal.[7]

[26] Qantas' notice of appeal contained four grounds of appeal, but in its submissions Qantas categorised these into three broad contentions of error. The first of these was that the Deputy President erred in too broadly characterising the subject matter and ambit of the dispute. In this respect, Qantas submitted:

• at its highest, the dispute concerned Qantas's interpretation of ss 789GD and 789GDA of the FW Act and r 10 of the Jobkeeper Payment Rules as it concerned the calculation of Mr Mazzitelli's pay for the period 13 April to 26 April 2020;

• the remedy sought by Mr Mazzitelli to review his payment for that period, ascertain whether he was entitled to the additional claimed amount of $852.30 and, if so, request that Qantas rectify the underpayment;

• the Deputy President erred by characterising the dispute in a way which did not confine it to the past period identified by Mr Mazzitelli;

• this error infected the Deputy President's assessment of Qantas' jurisdictional objections, in that he acknowledged the Chapter III difficulty if he were to deal with the dispute by arbitration but then noted that the Commission was not limited to the relief sought;

• it is very difficult to identify any form of arbitral order that could be made to settle a dispute involving an alleged past underpayment; and

• the Deputy President's conclusion that some form of unspecified arbitral relief might be available confirms that he characterised the dispute too broadly and thus dealt with Qantas' jurisdictional objections on the wrong basis.

[27] The second contention of error was that, while the Deputy President was of course required to ask whether the dispute was "about the operation of [Part 6-4C]" as a necessary step in satisfying himself of jurisdiction, it was not sufficient to merely ask that question in circumstances where Mr Mazzitelli sought arbitral relief. The Deputy President was then required to assess, in the circumstances of the particular case, the nature of the power the Commission would exercise were it to arbitrate that dispute. In this case, the dispute as properly characterised necessarily required the ascertainment of legal rights and obligations, which involved the exercise of judicial power. An arbitral award could only properly be concerned with the ascertainment of what rights and obligations should exist in the future, and the Commission can only validly form an opinion as to existing rights and obligations as a necessary step along the way to settling a dispute by creating new right via an arbitral award. In this case, no new rights were sought by Mr Mazzitelli; his application was wholly concerned with the enforcement of existing rights.

[28] The third contention was that the Deputy President proceeded on the basis that he was not confined in arbitrating the matter to the specific relief sought by Mr Mazzitelli without identifying to the parties what sort of relief other than that sought by Mr Mazzitelli might be available, nor did he raise with the parties the possibility that he might issue relief in a different form. In determining the dispute on a basis not agitated by either party and without alerting them that he might do so, the Deputy President denied Qantas the opportunity to address this in submissions and thus denied it procedural fairness.

[29] Qantas submitted that permission to appeal should be granted because the appeal raises questions about the Commission's power to deal with disputes under Part 6-4C which are novel and of general application and importance. It seeks that permission to appeal be granted, the appeal allowed and the decision quashed. It further seeks, on a rehearing, that we determine that the Commission lacks jurisdiction to deal with the dispute by arbitration and, given that the conciliation process has been exhausted, that Mr Mazzitelli's application be dismissed.

[30] We consider that permission to appeal should be refused, for five reasons.

[31] The first is that the decision under appeal involved no more than a determination that, if further conciliation did not resolve the matter, Mr Mazzitelli's application should be listed for an arbitral hearing. The only matter about which the Deputy President needed to be satisfied to take that step was whether there was a dispute about the operation of Part 6-4C of the FW Act between Mr Mazzitelli and Qantas such as to attract the Commission's jurisdiction under s 789GV. The Deputy President found that such a dispute existed, and Qantas' appeal does not challenge that finding.

[32] Qantas' jurisdictional objection at first instance was, in substance although not expressly described as such, an application for the summary termination of the proceedings. The Commission has power to summarily dismiss an application under s 587(1) of the FW Act where the application is not made in accordance with the FW Act, or is frivolous or vexatious or has no reasonable prospects of success. However, as was stated in the Full Bench decision in Bibawi v Stepping Stone Clubhouse Inc[8]:

"[17] ... Section 587(1)(a) of the FW Act empowers the Commission to dismiss an application where it has not been made in accordance with this Act, and s 587(1)(c) similarly empowers dismissal where an application has no reasonable prospects of success. This power may be exercised summarily - that is, an application may be dismissed pursuant to s 587(1) prior to a full hearing being conducted. Full Bench decisions such as Townsley v State of Victoria (Department of Education & Early Childhood Development) ( [2013] FWCFB 5834 at [17]- [19]) and Toma v Workforce Variable Pty Ltd ( [2018] FWCFB 5811 at [15]) have emphasised that the power to dismiss applications summarily should be exercised cautiously and sparingly, consistent with the principle stated by Barwick CJ in General Steel Industries Inc v Commissioner for Railways (NSW) ([1964] HCA 69[1964] HCA 69; , 112 CLR 125 at 128-129):

... the jurisdiction summarily to terminate an action is to be sparingly employed and is not to be used except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion... the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action ... is clearly demonstrated."

[33] In this case, we consider that it was necessary for Qantas to succeed in such an application for summary dismissal for it to demonstrate that there was no order which could be made by the Deputy President which would be within the power conferred on the Commission by s 789GV(4). We are not persuaded that this was demonstrated by Qantas at first instance or in its appeal submissions. It is not in issue that the Commission may not, in dealing with a dispute, exercise the judicial power of the Commonwealth which, under Chapter III of the Australian Constitution, is conferred on courts established pursuant to that chapter. The Commission therefore cannot by arbitration determine whether Qantas has complied with s 789GD or s 789GDA, nor can it order Qantas to pay amounts to which Mr Mazzitelli claims to be legally entitled. However that does not exclude the possibility that the Commission may properly exercise its arbitral power under s 789GV(4) to deal with the dispute between Mr Mazzitelli and Qantas, even assuming the narrow characterisation of the dispute postulated by Qantas, having regard to the fact that s 789GV(4)(d) empowers the Commission to make any order it considers appropriate.

[34] Two hypothetical examples of this may be postulated. The first is that the Deputy President may simply order the dismissal of Mr Mazzitelli's application on the basis of an expression of opinion that Qantas has reasonably allocated its payments to Mr Mazzitelli over two fortnights in accordance with r 10(3) of the Jobkeeper Payment Rules. The second is that the Deputy President orders Qantas and Mr Mazzitelli to confer in relation to the expression of an opinion by him Qantas has not reasonably allocated its payments under r 10(3). In either case, the order would appear to resolve the dispute in a manner consistent with the way in which Mr Mazzitelli said that he wanted the dispute resolved in his application. These examples, although not exhaustive, illustrate why Qantas could not succeed in making out its jurisdictional objection.

[35] Secondly, there is no basis to conclude that the Deputy President will, in arbitrating the dispute, purport to exercise judicial power. It is clear, we consider, from paragraphs [49]-[50] of the decision that the Deputy President fully comprehends the limits on the Commission's power in that respect. In any event, if the Deputy President ultimately makes some order which Qantas considers is beyond jurisdiction, it may lodge an appeal against that order and seek a stay of the order pending the determination of the appeal. There is no need for us at the present time to engage in some speculative exercise as to what orders the Deputy President might make if he proceeds to arbitrate the dispute.

[36] Third, we consider that Qantas' submissions concerning the characterisation and ambit of the dispute are somewhat artificial, having regard in particular to the facts that Mr Mazzitelli is a self-represented litigant and his application is not to be treated as a formal pleading. In his application, Mr Mazzitelli has attempted to define the dispute by reference to the two fortnightly payment periods in April, and it is also the case that he refers to the dispute as one relating to the question of his entitlement, but he has equally made it clear that he does not regard himself as pursuing (or simply pursuing) an underpayment claim. Although his application states that he wishes to know whether he is entitled to be paid an additional $852.30 for the second JobKeeper fortnight, he has not in terms sought an order for payment of this amount. His concern rather seems to be to obtain the opinion of the Commission as to the operation of certain aspects of Part 6-4C. The Commission could in our view express such an opinion if it so wished, although it would not be one that is in any way binding on the parties. In that respect, the position may arguably be analogous to that discussed by the Federal Court Full Court in Central Queensland Services Pty Ltd v CFMEU[9] at [48]-[49].

[37] Fourth, Qantas' procedural fairness point has no merit given that the Deputy President has not yet made any order in the proceedings adverse to its position in the dispute.

[38] Fifth, Qantas' appeal concerns an interlocutory decision. Permission to appeal against such decisions is not usually granted.[10] In this case, there are strong policy reasons why permission to appeal against a decision of this type should not be granted. Part 6-4C has been enacted to respond to what may reasonably be characterised as a health and economic crisis. The Commission has been invested with the power to deal with disputes about the operation of the Part, and we consider it crucial that it should exercise that power in an expeditious and efficient manner. Except in the clearest of cases, appeals against interlocutory decisions would not in that context be given any encouragement.

[39] For these reasons, we are not satisfied that it would be in the public interest to grant permission to appeal, nor do we consider that permission should be granted on a discretionary basis. We order that permission to appeal is refused.

Mr A Pollock of counsel on behalf of Qantas Airways Limited.

Mr T Slevin of counsel on behalf of the Australian Council of Trade Unions.

[1] [2020] FWC 2413

[3] Transcript, 7 May 2020, PN 65

[4] [2020] FWC 2413 at [45]

[7] [2020] FWC 2476

[8] [2019] FWCFB 1314, 285 IR 190

[9] [2017] FCAFC 43, 249 FCR 154, 268 IR 212

[10] Krcho v University of New South Wales & ors [2019] FWCFB 8269 at [41]

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