A Full Bench of the Fair Work Commission (Full Bench) has confirmed that employees do not accrue annual or long service leave during periods of lockout.

Key impacts

Employees are not entitled to accrue annual leave, or other service related entitlements, during periods of lockout.

Background

This decision arose from the Communications, Electrical and Plumbing Union (CEPU) disputing a decision of Deputy President Gostencnik of the Commission in which he determined that a period of employer response action during which employees were locked out of the workplace was an “unpaid authorised absence” and therefore excluded from being “service” under section 22 of the Fair Work Act 2009 (Cth) (Act). As this period did not count as service, employees did not accrue annual leave for the duration of the lock out.

The CEPU sought to distinguish the period of lock out from being an “authorised” absence by arguing that it was a “directed absence”, a term not used in the Act. It argued that a “directed absence” should count as service and annual leave should accrue. The CEPU also submitted that the original decision was unfair on the basis that it imposed an additional sanction on employees, who were already not receiving their usual remuneration during a “lockout” period.

Outcome

The Full Bench rejected the CEPU’s argument and found that the ordinary meaning of “unpaid authorised absence” clearly applied to the circumstances of a period of lockout.

The Full Bench found that when employees are absent from work and the employer is aware of, and endorses, such an absence (or even initiates or requires it), the absence is authorised regardless of whether the employees want to be absent or not. It further considered that where the absence is at the employer’s direction, it will also be an authorised absence under the Act.

The Full Bench further found that if even if the period was an unauthorised absence, it would specifically be excluded as counting as service in any case under section 22, and there was no third “category” of absence outside “authorised” and “unauthorised’.

The Full Bench concluded by stating that this approach accords with a consistent reading of the scheme in the Act, a key principle of which is that employees who take protected industrial action should be aware that they will not be paid for the period of their own industrial action, and any period of employer response action that follows as a result of their own industrial action. It would be “disharmonious” with this principle for annual leave to accrue during such periods.