The Qantas Group has advised its 20,000 stood-down employees it will use the JobKeeper allowance to pay down their annual leave, sparking claims the payment is being used as a “balance sheet subsidy”, not a wage subsidy.
The company’s position has enraged the Jetstar pilots union, which argues the airline should pay workers the $1500 a fortnight allowance on top of paid leave and other entitlements and not use it to pay down existing liabilities.
However, Qantas has pointed out that it is doing exactly as the government intended the payment to be used.
Australian Federation of Airline Pilots executive director Simon Lutton, representing Jetstar pilots, said the airline’s position was “outrageous” and that it was using the subsidy to pay down debts for which it should have already set aside payment.
We’re getting inundated by angry and concerned pilots who are in a very anxious state who have been stood down without pay and see no end in sight,” he said.
While Qantas Group has not directed stood-down staff to take leave, Mr Lutton said pilots had little choice but to exhaust their entitlements to maintain their full pay before eventually shifting to the minimum flat rate.
“Quite understandably it’s very difficult for pilots who earn quite a lot more than that and having ongoing obligations, whether it be mortgages or school fees. They are simply going to struggle on a longer-term basis,” he said.
“They can’t live on the equivalent of $39,000 a year without drawing down on their accrued entitlements.”
The JobKeeper subsidy is paid to employers who must then pass it on to staff and make up the full wage of those employees still working.
But for employees stood down due to lack of work, such as the vast majority of Qantas’s workforce, the employer only has to pay them the flat $1500.
Treasury on Sunday released a document confirming that employees on leave will not receive a pay increase as a result of JobKeeper and that the allowance was meant to “assist your employer to continue operating by subsidising part of your income”.
Qantas told employees in a Q&A on Friday that they can take either the $1500 or their paid leave entitlement but cannot use their leave to “top-up” the JobKeeper payment if their full wage is more than $1500 a fortnight.
“You may wish to take leave in some pay periods and rely on the JobKeeper payment only in other pay periods,” it said.
Jetstar has adopted a similar position but suggested it will also not pay JobKeeper on top of staff allowances earned in March and that are due to be paid in April.
The pilot union has written to Jetstar Group CEO Gareth Evans to call on him to urgently review the position and either recredit workers’ paid leave to the value of $1500 a fortnight or pass on the $1500 as a separate payment.
A Qantas Group spokesman said “the government has said in cases where employees have been stood down and elect to take paid annual leave, the JobKeeper payment will subsidise part of that income”.
“That’s exactly how we are applying the payment.”
Opposition industrial relations spokesman Tony Burke has called on the government not to pay the JobKeeper payment while employees run down their leave provisions.
“The employer shouldn’t have a situation where they’re paying a liability that they already owe, that’s already on their books, and take a payment from the government that’s meant to be a wage subsidy and take it for themselves,” he said.
“The whole change to what’s happened with withholding tax is there to help business cash flow. That’s already happening. The wage subsidy is not meant to be used for those purposes. That’s not why it’s there.”