The decision is expected to impact around 14 percent of Australia’s workforce – approximately 1.56 million employees in Australia.

The decision provides much needed flexibility to employers and employees in the rapidly changing environment of COVID-19. In particular, where a workplace close-down occurs, the changes allow employers to direct employees to take annual leave or leave without pay on short notice. The aim is to ensure the survival of businesses and to keep employees in their employment for as long as possible over the coming months.

The decision came into effect on 28 March 2020 and will apply until 30 June 2020. Similar changes have already been made to the Hospitality Industry (General) Award 2010 which came into effect on 24 March 2020. A similar application to vary the Restaurant Industry Award 2010 was made on 30 March 2020 and is currently before the FWC.

The application

The application to vary the Clerks Award was made by the Australian Chamber of Commerce and Industry (ACCI) and the Australian Industry Group (Ai Group). The application was supported by the Australian Services Union and the Industrial Relations Minister, Christian Porter.

The application introduced ‘Schedule I – Award Flexibility during the COVID-19 pandemic’ in to the Clerks Award. The schedule outlines the following:

• Alternative duties – employers can direct employees to perform any duties within their ‘skill and competency’, however wages must not be reduced.
• Minimum shifts – two hour minimum shifts for part-time and casual employees working from home.
• Span of hours – employees working from home may request to work their ordinary hours within an extended span of hours, being 6.00am – 11.00pm Monday to Friday and 7.00am – 12.30pm on Saturday.
• Reduction of ordinary hours – employers can reduce hours of work for full-time and part-time employees to 75 percent of their ordinary hours, if it is approved by at least 75 percent of full-time and part-time employees in the workplace (e.g. through a vote).
• Annual leave – employers may direct employees to take annual leave, and at a reduced rate if agreed upon, by giving at least one week's notice:
  • at any time, provided the employee has at least two week's accrued annual leave at the time the direction is made
  • during a close down of the employer’s business (in this case, where employees have insufficient leave they can be directed to take unpaid leave).

The ACCI and Ai Group argued that these changes are necessary in the circumstances of the COVID-19 pandemic, which has changed the meaning of what is ‘fair’ and ‘relevant’.

The FWC’s decision

A Full Bench of the FWC granted the joint application by special telephone sitting on Saturday, 28 March 2020. The Full Bench was satisfied that these changes were necessary to achieve the objectives of the modern award, by aiming to keep people employed and keep businesses operating during the COVID-19 pandemic.

The changes came into operation on the same day, and will stay in place until 30 June 2020. Notably, the changes only apply to an employee at the start of their first full pay period after 28 March 2020.

Lessons for employers

This decision significantly reduces the regulatory burden for many employers who have employees covered by the Clerks Award and who are impacted by the COVID-19 pandemic.

The changes provide much needed flexibility with respect to annual leave and hours of work, allowing businesses to look at other measures to keep people employed during the COVID-19 pandemic.

In light of these changes, it is important for employers to promptly communicate with any employees covered by the Clerks Award, and to adopt the changes in their approach, where possible, when consulting with employees about working from home and leave arrangements.

Maddocks has produced guides to a range of legal issues raised by the coronavirus (COVID-19). You can access these guides here.