Qantas JobKeeper case – How to properly calculate JobKeeper payments

In a recent decision of Qantas Airways Limited v Flight Attendants’ Association of Australia (the JobKeeper Case) the Federal Court of Australia considered and determined the correct application of the JobKeeper provisions contained in section 789GDA(2)(b) of the Fair Work Act 2009.

Relevant JobKeeper provision

Section 789GDA(2)(b) contains the “minimum payment guarantee”, which operates to determine the amount payable to an employee for a relevant JobKeeper fortnight. It requires that an employer pays its employees the greater of:

  1. the amount of JobKeeper payment payable to the employer for the employee for the fortnight (at the time, this was $1,500); or
  2. the amounts payable to the employee in relation to the performance of work during the fortnight.

In the JobKeeper Case the Federal Court considered the meaning of “the amounts payable to the employee in relation to the performance of work during the fortnight” and confirmed how employers should be calculating employee payments for a JobKeeper fortnight.

Background

The Flight Attendants’ Association of Australia, the Transport Workers’ Union and the Australian Municipal, Administrative, Clerical and Services Union (Unions) brought a challenge against the approach taken by Qantas in calculating and paying its employees under the JobKeeper provisions, in particular for employees who had been stood down.

Qantas argued that the correct construction of section 789GDA(2)(b) requires employers to consider the amounts paid to an employee during the fortnight, regardless of whether the amount is paid for work done or entitlements accrued during or before the relevant fortnight. Qantas’s interpretation of the provisions meant that if an employee was paid for work done in a prior fortnight, it would be included in the calculation of the minimum payment guarantee.

The effect of this interpretation can be seen in the following example:

  • the employee is stood down in fortnight B;
  • the employee earns $2,000 in wages for work done in the prior fortnight (fortnight A);
  • the $2,000 for the work done in fortnight A is payable to the employee in fortnight B (because of the employer’s pay-cycle); and
  • the employee receives a total payment of $2,000 in fortnight B, with no additional payment from the JobKeeper payment.

Finding

The Federal Court did not agree with the construction proposed by Qantas. Instead, they found that when calculating the “amounts payable… in relation to the performance of work during a fortnight” employers should only consider the money owing to employees for work performed in that same fortnight. Importantly, this amount does not include amounts payable to an employee for work performed in a previous fortnight.

The Federal Court emphasised that section 789GDA(2) requires the employer to identify the point in time that work is performed and the amount of money an employee is contractually entitled to receive for that work. It does not require consideration of any amounts owing to employees from previous fortnights.

The Federal Court noted that it does not matter if, as a result, the employee receives a total payment in a particular fortnight that is greater than $1,500 because (for example) an employee is receiving money for work performed in a prior period.

On this basis, in the example set out above the employee would be entitled to a payment of $3,500 in fortnight B, because the $2,000 in wages for fortnight A was not payable for work done in fortnight B.

How does this effect other employers?

The Federal Court applied their approach to the individual claims brought by the Unions, which resulted in a number of employees being compensated for unpaid wages.

This decision has far reaching effects for any employer with employees receiving JobKeeper payments. All employers are required to calculate JobKeeper payments in line with the method proposed by the Federal Court in the JobKeeper Case. Failure to do so could result in a claim by employees for unpaid wages.

For assistance in interpreting an employer’s obligations with respect to JobKeeper payments, please contact our office.

Share this post with your friends

Share on facebook
Share on twitter
Share on linkedin

Related Posts