A recent FWC decision involving a cruise operator struggling with the challenges of Covid-19 provides a good blueprint for other businesses in these troubled times. The operator, Coral Expeditions, sought to stand down 107 employees while also transferring certain duties to remaining employees.
A marine superintendent, (one of the 107 selected) contended that his employer Coral Expedition’s decision to stand him down was in contravention of s524 of the Fair Work Act 2009 (the Act). The fundamental question to be determined by FWC turns on whether there was any `useful work‘ for the Applicant to perform. The Superintendent argued that there was still available work that he could perform, in particular as others were now performing some of his ordinary duties.
There is no doubt that the employer is suffering significant losses in some of the most extreme conditions they are likely ever to face. As a result of government mandates to cease work arising from the pandemic, the business currently has no revenue, with the 107 staff stood down representing 50% of the workforce.
In considering the Superintendent’s application, Deputy President Nicholas Lake observed that three “primary criteria” must be satisfied for a stand-down to be lawful under s524(1).
“First, the employee must be stood down during a time in which they cannot be usefully employed,” he said…”Second, one of the three sub-criteria must be present . . . In the present case, s524(1)(c) has been argued: a stoppage of work for which the employer cannot be held responsible..”The third criteria dictates that the employee cannot be usefully employed because of the stoppage.”
With respect to the Superintendent’s situation, the DP further commented “The Applicant contends that because the work that he performs continues, his role is automatically considered “useful” to the Respondent. This appears to be an incorrect construction of the law around useful employment, as a role can be considered useful, but not a particular individual, as stated in Re Carpenters.
On the evidence of the Respondent, the Marine Team, of which the Marine Superintendent is part, is capable of reallocating the work to other individuals within the Department. The particular tasks being performed by the Marine Superintendent, due to COVID-19 have largely diminished in size. The ship has half as many employees, reducing the HR tasks; large portions of maintenance, except routine work, have been postponed and attendance with regulatory bodies is currently minimal. In this environment, the role of the Marine Superintendent can be performed by the other currently retained employees. Given the shift in available work, I am not persuaded that there is sufficient useful work for the Applicant to perform.”
In Lake’s estimation, the employer had made a genuine attempt to salvage their operations and in attempting to do so, were fair and transparent in all dealings with employees.
Consequently, he determined that the Superintendent was not capable of useful employment, and his claim was dismissed.
For queries about stand down, redundancy or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 0417 622 178 or via email to email@example.com
Disclaimer: This information is provided as general advice on workplace relations and employment law. It does not constitute legal advice and it is always advisable to seek further information regarding specific workplace issues. Liability limited by a scheme approved under professional standards legislation.