A recent Federal Court decision has clarified that employees are not entitled to access personal/carer’s leave (“sick leave”) during any period of stand-down.
In arriving at this position, Justice Flick of the Federal Court considered the purpose of stand-down provisions, as well as the underlying nature and objective of sick-leave entitlements.
The purpose of stand-down provisions:
Justice Flick considered that the ability to stand employees down exists as a form of protection for both employers and employees.
Employers are protected via financial relief of not having to pay wages in circumstances where, through no fault of their own, the employer has no work for the employee to usefully perform. Employees are protected from termination, as without the ability to stand the employee down, the employer would have to consider making the employee redundant.
Such protections are intended to preserve as many aspects of the employment relationship as possible without it coming to an end.
The purpose of personal/carer’s (sick) leave provisions:
Justice Flick considered that sick leave entitlements by their very nature are intended to protect employees from loss of income. Sick leave entitlements authorise employees to be absent from work during periods of illness or injury and requires employees to be paid as if they had not been absent.
In this sense, sick leave entitlements are intended to operate as a form of income protection for the employee whilst they are unfit for work. However, Justice Flick noted that inherent in this entitlement is that there is work for employee to perform and be absent from.
The Federal Court’s decision and reasoning:
After analysing the purpose of both stand down and sick leave entitlements, the Federal Court held employees are not entitled to access sick leave during any period of stand down.
If employees had the right to use sick leave during stand down, as Justice Flick reasoned, it would defeat one of the dual purposes of having stand down provisions in the first place. Specifically, it would undermine the financial relief for employers in having to pay employee wages.
The sick leave entitlement is also not intended to be a source of income. Rather, it is a relief for employees from having to perform work and an entitlement to be paid as if worked. In situations where there is no work to perform due to stand down, there can be no such protection. The entitlement presupposes there is work to be unfit for and be absent from. There can be no protection against loss of income where there is no income to have lost.
Important take-away points:
The decision is a timely clarification for members that have stood down employees. It confirms that such employees have no right to claim payment for sick days whilst they are stood down. The decision also extends to compassionate leave during stand down.
Please note, the decision may be subject to appeal.
If you would like to discuss your individual situation further, please contact the Master Builders Industrial Relations Department on (03) 9411 4555.