The Fair Work Commission has recently dealt with three disputes concerning employees who were stood down during the COVID-19 pandemic, either through the pre-existing provisions in the Fair Work Act or a Jobkeeper enabling stand down direction. Given all three decisions found in favour of the employee, employers should proceed with caution before directing any staff to stand down.
Employers may stand employees down under the Fair Work Act 2009 (Cth) (FW Act) using the pre-existing stand down provisions or the temporary Jobkeeper enabling stand down directions. Applicable awards and enterprise agreements may also entitle employers to issue stand down directions. These stand down provisions have been used by many employers in recent months as they navigate through the financial effects of the COVID-19 pandemic. While stand downs can assist businesses in reducing their labour costs and, at least in the short term, prevent redundancies, three recent disputes in the Fair Work Commission demonstrate a trend of employers incorrectly applying their stand down powers.
In ordinary circumstances, an employer may only stand down an employee during a period in which the employee cannot be usefully employed because one of the following circumstances:
(a) industrial action
(b) a breakdown of a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown;
(c) a stoppage of work for any cause for which the employer cannot reasonably be held responsible,
(see section 524 of the FW Act).
The provisions under s 524 of the FW Act set a high bar for employers to stand down employees, given that employees are not paid during a stand down period. Previous case law has made it clear that a ‘stoppage’ has to be more than a reduction in work.1
In May 2020, Thomas Foods International stood down a clerk in its expert documentation team for an indefinite period, relying on there being a stoppage of work pursuant to s 524 of the FW Act. After five weeks of being stood down without pay, and with no indication of when the stand down period would end, the employee requested to be made redundant. Although the employer eventually agreed to the redundancy, the Fair Work Commission considered whether the employer had the right to stand the employee down for the period prior to termination.
While the Commission recognised that the demand for the level of work in the employee’s business unit reduced in response to the pandemic, it was not a stoppage of work within the meaning of s 524 of the FW Act. It further considered that although it was fair for Thomas Foods to reduce working hours in the export documentation team, it was unfair for the employer to impose the whole burden of reduction in hours on one employee (the clerk) whilst retaining full time employment amongst other members of the business unit.
In ultimately determining that the stand down was inconsistent with the FW Act, Deputy President Anderson said,
“A fair approach would have been for Thomas Foods to apply some apportionment to the reduction to comparable employees in the export documentation team, not singularly to [the clerk].”
In a similar decision this month, Deputy President Anderson again reiterated that the burden of reducing labour costs should not fall on one employee.
In April 2020, manufacturer Ideal Acrylics stood down a full-time machinist, also relying on there being a stoppage of work under s 524 of the FW Act. During the stand-down period, one of its directors filled the machinist’s duties.
The Commission found that although Ideal Acrylics had experienced a slowing of demand for orders due to the pandemic’s economic effect which did warrant a reduction in labour costs, the work of Ideal Acrylics did not stop. It therefore did not constitute a stoppage of work under s 524.
The Commission also found that the machinist could have been “usefully employed” during the stand down period, given that from time to time he performed fabrication work. The Deputy President considered it unfair that other fabricators in the business retained their full-time hours and income unchanged whilst the machinist was stood down for three months without pay. The Deputy President again noted,
“A fair approach would have been for Ideal Acrylics to apply some apportionment to the reduction of labour between [the machinist] and other manufacturing employees performing work that he was also capable of performing.”
On 9 April 2020, the FW Act was amended to include additional provisions to allow employers to stand down employees, either partially or in full, during the COVID-19 pandemic if they meet the eligibility requirements for the Jobkeeper wage subsidy scheme (see our guide here for further information). These Jobkeeper enabling stand down directions will cease when the scheme ends but are broader in scope than the stand down powers under s 524.
In summary, a Jobkeeper enabling stand down direction allows employers to direct employees to reduce their days and hours of work, including reducing their hours to nil, if the employee cannot be usefully employed for their normal days or hours because of changes to the business attributable to the COVID-19 pandemic. An employee who is the subject of such a direction is not be paid for the hours they did not work, however the employee must still be paid the “minimum payment guarantee”.
In March 2020, Live Events Australia asked its staff (nationally) to agree to up to a 40% reduction in salary and subsequent working hours. All staff, other than one broadcast engineer, agreed to the reduction.
In June 2020, Live Events issued the broadcast engineer a Jobkeeper enabling stand down direction that his minimum hours of work be reduced from 80 to 48 hours per fortnight (a 40% reduction). The broadcast engineer challenged the stand down direction on the basis that the requirement that he “cannot usefully be employed” for his normal days or hours had not been met and that the direction contravened s 789GK of the FW Act because is was “unreasonable in all the circumstances”.
The Commission held that although the Live Events’ direction was authorised by the FW Act, the terms of the direction were unreasonable. This was because at the same time Live Events issued the Jobkeeper enabling stand down direction to the broadcast engineer, it lifted the 40% reduction imposed on other staff to a 20% reduction. Live Events advised its staff at the time that the 20% reduction more accurately reflected the then business circumstances. Deputy President Anderson held that a direction on reasonable terms would have been for Live Events to reduce the broadcast engineer’s hours to up to 20%.
While the Commission varied the stand down direction to that effect, it noted:
“it would be inappropriate for Live Events to leave the Direction in place (even in its varied form) if, during the period of its operation, the employer generally lifted the 20% reduction for other employees and returned its workforce to 100% of hours and salary.”
The current economic climate means that employees are now more likely than ever to challenge a stand down, which could well result in the Fair Work Commission finding in favour of the employee. Therefore, before issuing a stand down direction, employers should take note of the following:
Please note this information is a guide only and does not constitute legal advice. If you have any questions regarding your entitlements to stand down staff, please get in touch with McCabes Employment Group.
1 Bristow Helicopters Australia Pty Ltd v Australian Federation of Air Pilots  FWCFB 487
2 Mr Ryan La Plume v Thomas Foods International Pty Limited T/A Thomas Foods International  FWC 3690 (15 July 2020)
3 Kurt Stelzer v The Trustee for The Ideal Acrylics Unit Trust T/A Ideal Acrylics  FWC 4129 (7 August 2020)
4 Allan Jones v Live Events Australia Pty Ltd  FWC 3469 (3 July 2020)
In June 2023, a Canadian Court in South-West Terminal Ltd v Achter Land and Cattle Ltd, 2023 SKKB 116, held that the "thumbs-up" emoji carried enough weight to constitute acceptance of contractual terms, analogous to that of a "signature", to establish a legally binding contract. Facts This case involved a contractual dispute between two parties namely South-West Terminal ("SWT"), a grain and crop inputs company; and Achter Land & Cattle Ltd ("ALC"), a farming corporation. SWT sought to purchase several tonnes of flax at a price of $17 per bushel, and in March 2021, Mr Mickleborough, SWT's Farm Marketing Representative, sent a "blast" text message to several sellers indicating this intention. Following this text message, Mr Mickleborough spoke with Mr Achter, owner of ALC, whereby both parties verbally agreed by phone that ALC would supply 86 metric tonnes of flax to SWT at a price of $17 per bushel, in November 2021. After the phone call, Mr Mickleborough applied his ink signature to the contract, took a photo of it on his mobile phone and texted it to Mr Archter with the text message, "please confirm flax contract". Mr Archter responded by texting back a "thumbs-up" emoji, but ultimately did not deliver the 87 metric tonnes of flax as agreed. Issues The parties did not dispute the facts, but rather, "disagreed as to whether there was a formal meeting of the minds" and intention to enter into a legally binding agreement. The primary issue that the Court was tasked with deciding was whether Mr Achter's use of the thumbs-up emoji carried the same weight as a signature to signify acceptance of the terms of the alleged contract. Mr Mickleborough put forward the argument that the emoji sent by Mr Achter conveyed acceptance of the terms of the agreement, however Mr Achter disagreed arguing that his use of the emoji was his way of confirming receipt of the text message. By way of affidavit, Mr Achter stated "I deny that he accepted the thumbs-up emoji as a digital signature of the incomplete contract"; and "I did not have time to review the Flax agreement and merely wanted to indicate that I did receive his text message." Consensus Ad Idem In deciding this issue, the Court needed to determine whether there had been a "formal meeting of the minds". At paragraph , Justice Keene considered the reasonable bystander test: " The court is to look at “how each party’s conduct would appear to a reasonable person in the position of the other party” (Aga at para 35). The test for agreement to a contract for legal purposes is whether the parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract (Aga at para 36). The question is not what the parties subjectively had in mind, but rather whether their conduct was such that a reasonable person would conclude that they had intended to be bound (Aga at para 37)." Justice Keene considered several factors including: The nature of the business relationship, notably that Mr Achter had a long-standing business relationship with SWT going back to at least 2015 when Mr Mickleborough started with SWT; and The consistency in the manner by which the parties conducted their business by way of verbal conversation either in person or over the phone to come to an agreement on price and volume of grain, which would be followed by Mr Mickleborough drafting a contract and sending it to Mr Achter. Mr Mickleborough stated, "I have done approximately fifteen to twenty contracts with Achter"; and The fact that the parties had both clearly understood responses by Mr Achter such as "looks good", "ok" or "yup" to mean confirmation of the contract and "not a mere acknowledgment of the receipt of the contract" by Mr Achter. Judgment At paragraph , Keene J said: "I am satisfied on the balance of probabilities that Chris okayed or approved the contract just like he had done before except this time he used a thumbs-up emoji. In my opinion, when considering all of the circumstances that meant approval of the flax contract and not simply that he had received the contract and was going to think about it. In my view a reasonable bystander knowing all of the background would come to the objective understanding that the parties had reached consensus ad item – a meeting of the minds – just like they had done on numerous other occasions." The court satisfied that the use of the thumbs-up emoji paralleled the prior abbreviated texts that the parties had used to confirm agreement ("looks good", "yup" and "ok"). This approach had become the established way the parties conducted their business relationship. Significance of the Thumbs-Up Emoji Justice Keene acknowledged the significance of a thumbs-up emoji as something analogous to a signature at paragraph : "This court readily acknowledges that a thumbs-up emoji is a non-traditional means to "sign" a document but nevertheless under these circumstances this was a valid way to convey the two purposes of a "signature" – to identify the signator… and… to convey Achter's acceptance of the flax contract." In support of this, Justice Keene cited the dictionary.com definition of the thumbs-up emoji: "used to express assent, approval or encouragement in digital communications, especially in western cultures", confirming that the thumbs-up emoji is an "action in an electronic form" that can be used to allow express acceptance as contemplated under the Canadian Electronic Information and Documents Act 2000. Justice Keene dismissed the concerns raised by the defence that accepting the thumbs up emoji as a sign of agreement would "open the flood gates" to new interpretations of other emojis, such as the 'fist bump' and 'handshake'. Significantly, the Court held, "I agree this case is novel (at least in Skatchewan), but nevertheless this Court cannot (nor should it) attempt to stem the tide of technology and common usage." Ultimately the Court found in favour of SWT, holding that there was a valid contract between the parties and that the defendant breached by failing to deliver the flax. Keene J made a judgment against ALC for damages in the amount of $82,200.21 payable to SWT plus interest. What does this mean for Australia? This is a Canadian decision meaning that it is not precedent in Australia. However, an Australian court is well within its rights to consider this judgment when dealing with matters that come before it with similar circumstances. This judgment is a reminder that the common law of contract has and will continue to evolve to meet the everchanging realities and challenges of our day-to-day lives. As time has progressed, we have seen the courts transition from sole acceptance of the traditional "wet ink" signature, to electronic signatures. Electronic signatures are legally recognised in Australia and are provided for by the Electronic Transactions Act 1999 and the Electronic Transactions Regulations 2020. Companies are also now able to execute certain documents via electronic means under s 127 of the Corporations Act. We have also seen the rise of electronic platforms such as "DocuSign" used in commercial relationships to facilitate the efficient signing of contracts. Furthermore, this case highlights how courts will interpret the element of "intention" when determining whether a valid contract has been formed, confirming the long-standing principle that it is to be assessed objectively from the perspective of a reasonable and objective bystander who is aware of all the relevant facts. Overall, this is an interesting development for parties engaging in commerce via electronic means and an important reminder to all to be conscious of the fact that contracts have the potential to be agreed to by use of an emoji in today's digital age.
The McCabes Government team are pleased to have assisted Venues NSW in successfully overturning a District Court decision holding it liable in negligence for injuries sustained by a patron who slipped and fell down a set of steps at a sports stadium; Venues NSW v Kane  NSWCA 192 Principles The NSW Court of Appeal has reaffirmed the principles regarding the interpretation of the matters to be considered under sections5B of the Civil Liability Act 2002 (NSW). There is no obligation in negligence for an occupier to ensure that handrails are applied to all sets of steps in its premises. An occupier will not automatically be liable in negligence if its premises are not compliant with the Building Code of Australia (BCA). Background The plaintiff commenced proceedings in the District Court of NSW against Venues NSW (VNSW) alleging she suffered injuries when she fell down a set of steps at McDonald Jones Stadium in Newcastle on 6 July 2019. The plaintiff attended the Stadium with her husband and friend to watch an NRL rugby league match. It was raining heavily on the day. The plaintiff alleged she slipped and fell while descending a stepped aisle which comprised of concrete steps between rows of seating. The plaintiff sued VNSW in negligence alleging the stepped aisle constituted a "stairwell" under the BCA and therefore ought to have had a handrail. The plaintiff also alleged that the chamfered edge of the steps exceeded the allowed tolerance of 5mm. The Decision at Trial In finding in favour of the plaintiff, Norton DCJ found that: the steps constituted a "stairwell" and therefore were in breach of the BCA due to the absence of a handrail and the presence of a chamfered edge exceeding 5mm in length. even if handrails were not required, the use of them would have been good and reasonable practice given the stadium was open during periods of darkness, inclement weather, and used by a persons of varying levels of physical agility. VNSW ought to have arranged a risk assessment of the entire stadium, particularly the areas which provided access along stepped surfaces. installation of a handrail (or building stairs with the required chamfered edge) would not impose a serious burden on VNSW, even if required on other similar steps. Issues on Appeal VNSW appealed the decision of Norton DCJ. The primary challenge was to the trial judge's finding that VNSW was in breach of its duty of care in failing to install a handrail. In addition, VNSW challenged the findings that the steps met the definition of a 'stairwell' under the BCA as well as the trial judge's assessment of damages. Decision on Appeal The Court of Appeal found that primary judge's finding of breach of duty on the part of VNSW could not stand for multiple reasons, including that it proceeded on an erroneous construction of s5B of the Civil Liability Act 2002 and the obvious nature of the danger presented by the steps. As to the determination of breach of duty, the Court stressed that the trial judge was wrong to proceed on the basis that the Court simply has regard to each of the seven matters raised in ss 5B and 5C of the CLA and then express a conclusion as to breach. Instead, the Court emphasised that s 5B(1)(c) is a gateway, such that a plaintiff who fails to satisfy that provision cannot succeed, with the matters raised in s 5B(2) being mandatory considerations to be borne in mind when determining s 5B(1)(c). Ultimately, regarding the primary question of breach of duty, the Court found that: The stadium contained hazards which were utterly familiar and obvious to any spectator, namely, steps which needed to be navigated to get to and to leave from the tiered seating. While the trial judge considered the mandatory requirements required by s5B(2) of the CLA, those matters are not exhaustive and the trial judge failed to pay proper to attention to the fact that: the stadium had been certified as BCA compliant eight years before the incident; there was no evidence of previous falls resulting in injury despite the stairs being used by millions of spectators over the previous eight years; and the horizontal surfaces of the steps were highly slip resistant when wet. In light of the above, the Court of Appeal did not accept a reasonable person in the position of VNSW would not have installed a handrail along the stepped aisle. The burden of taking the complained of precautions includes to address similar risks of harm throughout the stadium, i.e. installing handrails on the other stepped aisles. This was a mandatory consideration under s5C(a) which was not properly taken into account. As to the question of BCA compliance, the Court of Appeal did not consider it necessary to make a firm conclusion of this issue given it did not find a breach of duty. The Court did however indicated it did not consider the stepped aisle would constitute a "stairway" under the BCA. The Court of Appeal also found that there was nothing in the trial judge's reasons explicitly connecting the risk assessment she considered VNSW ought to have carried out, with the installation of handrails on any of the aisles in the stadium and therefore could not lead to any findings regarding breach or causation. As to quantum, the Court of Appeal accepted that the trial judge erred in awarding the plaintiff a "buffer" of $10,000 for past economic loss in circumstances where there was no evidence of any loss of income. The Court of Appeal set aside the orders of the District Court and entered judgment for VNSW with costs. Why this case is important? The case confirms there is no obligation in negligence for owners and operators of public or private venues in NSW to have a handrail on every set of steps. It is also a welcome affirmation of the principles surrounding the assessment of breach of duty under s 5B and s 5C of the CLA, particularly in assessing whether precautions are required to be taken in response to hazards which are familiar and obvious to a reasonable person.
The recent decision in New Aim Pty Ltd v Leung  FCAFC 67 (New Aim) has provided some useful guidance in relation to briefing experts in litigation.