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Qantas loses bid to use jobkeeper subsidy to soak up larger portion of wages bill

Paul Karp
Photograph: James D Morgan/Getty Images

Qantas has lost a bid to use the jobkeeper wage subsidy to soak up a larger portion of its wages bill by topping up a worker’s pay on a monthly – rather than fortnightly – basis.

The Fair Work Commission ruled on Friday it was unreasonable for Qantas to pay a manager just $3,000 a month – the level of the jobkeeper subsidy – while also gaining the benefit of his labour.

Instead, the airline has been directed to top up the worker’s pay to $1,500 every fortnight, which would prevent it using the subsidy in a fortnight work was not performed to pay for weeks it was, ending a bid to capture hundreds of dollars more of the subsidy.

The Australian Services Union seized on the decision to argue that hundreds of workers at the airline have been underpaid but the company has not conceded the point, arguing it is “at odds” with jobkeeper rules and has no wider application.

In April Guardian Australia revealed the ASU had complained to Qantas that it was inappropriate to use the jobkeeper payment for one fortnight to pay for penalty rates accrued in the preceding fortnight.

Related: Scott Morrison dismisses calls for Josh Frydenberg to front Covid-19 inquiry over jobkeeper

In a dispute taken to the commission, planning and engagement manager Mathew Mazzitelli argued he had been shortchanged because he is paid monthly.

In April, Qantas paid Mazzitelli a total of $3,000, consisting of $2,350 of gross pay and a $650 jobkeeper top-up, representing the amount the airline believed it owed to comply with the rules of the subsidy that employees must be paid at least $1,500 per fortnight.

Mazzitelli argued if this minimum were applied to each fortnight – rather than the whole month – Qantas would have owed him a top-up of $1,030.

The Fair Work deputy president, Peter Anderson, found that either reading of the jobkeeper rules appeared open to Qantas, which he said had interpreted them in “good faith”.

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But Anderson said it was not reasonable for Qantas to pay Mazzitelli exactly $3,000 – the amount it received from the commonwealth – while it also “secured the value of Mazzitelli’s labour for those working days in jobkeeper fortnight one before he was stood down”.

“Neither an employee nor an employer should secure benefit from the wage subsidy other than to meet the scheme’s objective of maintaining employment relationships during the pandemic-induced downturn in economic activity, and to have the scheme subsidise wages of employees who are either stood down or whose earnings are impaired,” he said.

“Whilst Qantas did not seek that benefit, the effect of its payment methodology saw it secure the value of labour performed by Mr Mazzitelli plus secure a subsidy, whilst only paying the value of that subsidy to Mr Mazzitelli.”

Anderson recommended that Qantas reverse its decision with respect to Mazzitelli, but made no ruling about whether it had complied with the jobkeeper rules.

He said the decision dealt with “Mazzitelli’s circumstances only” and different considerations may be needed to decide what was reasonable for other employees.

ASU national assistant secretary, Linda White, told the Australian Financial Review the case should put a stop to Qantas’s practices of using jobkeeper to pay penalty rates and correct payroll errors from proceeding fortnights.

Related: Frydenberg rules out 'wholesale changes' to jobkeeper despite $60bn underspend

“What the commission says supports what a bunch of unions have been saying to Qantas for weeks and weeks,” she reportedly said.

“This is one example of hundreds of cases, if not thousands of cases. Anybody who’s worked for any period can face this issue depending on when they worked and when they get paid and the offset against it. It’s a very, very live issue.”

A Qantas spokesman said the airline was considering its options following the decision.

“The comments from the commissioner are at odds with the intent and purpose of the jobkeeper scheme and the advice provided to businesses from Treasury and the Australian Tax Office, which we are following,” he said.

“It is wrong for the ASU to try and claim this decision has any bearing on other employees. The commissioner clearly said that his comments relate to one individual.”