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Pandemic leave and changes to annual leave in Modern Awards

Libby Pallot, Walter MacCallum, Anthony Massaro, Ben Tallboys, Abbey Burns, Caitlin Walsh, Caitlin Meers, Natasha Sim, Morgan Smithe & Sophie Cusworth

Information current at date of publication: 17 April 2020. The average reading time for this Alert is 5 minutes.

The Fair Work Commission has amended 99 modern awards to include special provisions relating to the COVID-19 pandemic. If these awards apply to an employee, they will now be entitled to unpaid pandemic leave and double annual leave at half pay. These amendments have effect from 8 April until 30 June 2020, unless otherwise extended. 

The Fair Work Commission previously amended some modern awards in response to specific applications to include temporary provisions which allow greater workplace flexibility during the COVID-19 pandemic. You can find our Alert regarding changes to the Clerks – Private Sector Award here. However, at its own initiative, the Fair Work Commission has now varied a total of 99 modern awards, by inserting Schedule X: Additional measures during the COVID-19 pandemic

In determining the awards to be varied, the Commission had regard to the industries and associated awards which are most likely to be affected by the COVID-19 pandemic. 

Schedule X provides for the following additional measures:

Unpaid pandemic leave

If an employee is prevented from working as a result of a government or medical direction to self-isolate, or a measure taken by a government or medical authority in response to the COVID-19 pandemic, the employee is entitled to take up to 2 weeks’ unpaid leave. The employee must provide their employer with notice, as well as identify the reason for taking leave. The employer can also require the employee to provide appropriate evidence of the reason for taking leave. It is also possible for the employee to take a period of unpaid leave which is longer than two weeks, if their employer agrees. 

If an employee does take unpaid pandemic leave, the period of leave must start before 30 June 2020 but can end after that date. 

While pandemic leave does provide some protection for employees who are required to take leave to self-isolate, the changes do not otherwise go beyond what many employers and employees have been arranging by agreement since the pandemic started to affect business.

Annual leave at half pay

An employee can elect to take double their annual leave entitlement at half of their rate of pay, by agreement with their employer. For example, under an agreement, an employee may take two weeks’ annual leave, and will be entitled to the same pay that they would have received for one week’s leave on full pay. This agreement must be made in writing and kept on record. 

If an agreement is made for an employee to take twice as much annual leave at half pay, the period of leave must start before 30 June 2020. 

The Fair Work Commission’s statement, and a list of the 99 affected modern awards, can be found here. Employers should be aware that these variations made by the Commission do not preclude other applications to vary modern awards. This means that further variations may be made to provide additional measures throughout the COVID-19 pandemic.

What this means for employers

While not as significant as the JobKeeper amendments which took effect at the same time, these changes may provide employers with additional or alternative options, and they do not have the same eligibility requirements as the JobKeeper scheme. 

When deciding whether to take steps under a modern award, the JobKeeper scheme or by agreement outside those measures, employers will need to understand their options. For example, like an agreement under Schedule X, the JobKeeper scheme allows employers and employees to agree to take double leave at half pay. Employers have more leverage under the JobKeeper scheme because the employee cannot unreasonably refuse this request, however, the agreement will only be valid where the employee has two weeks of annual leave remaining after the leave is taken and the employee and employer are both eligible for the JobKeeper scheme. By comparison, an agreement could be made under Schedule X under which the employee takes all of their annual leave at half pay, regardless of whether the parties are eligible for JobKeeper.

How we can help

For further information on managing your legal obligations in relation to the COVID-19 pandemic, please contact the Russell Kennedy Workplace Relations, Employment and Safety team.

If you would like to keep in touch with Alerts and Insights from our expert Workplace Relations, Employment and Safety team, you can subscribe to our mailing list here.

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