It was reported yesterday that Qantas Airways Limited (ASX: QAN) lost its jobkeeper court case.
What has been happening?
According to reporting by the Australian Financial Review, the airline now owes thousands of dollars in backpay after a court decided that Qantas hadn’t correctly been allocating the jobkeeper payments.
The court decided that Qantas couldn’t use worker wages paid in arrears to reduce the top-up amount needed to pay the minimum of $1,500 a fortnight under jobkeeper.
Qantas had been paying penalty wages to staff in fortnights they didn’t work, in line with the enterprise agreement. The AFR gave an example: an employee can perform work and overtime that give rise to earnings of $3000 but $1500 of that in overtime penalties would not be paid until the next fortnight. In a case where the employee was stood down the next fortnight, the airline argued it could count the $1500 towards that fortnight’s minimum $1500 JobKeeper payment rather than simply in addition to the earnings paid during the previous fortnight. As a result, the employee would be paid just $3000, not the $4500.
But the judge didn’t agree. The ruling decided penalty payments paid in arrears can’t be set off against the jobkeeper payment.
According to the AFR, a Qantas spokesman said it was trying to follow tax office guidance and “made sure all employees receive a ‘safety net’ payment of $1500 per fortnight. That ‘safety net’ assurance is a central part of the government’s JobKeeper policy. Today’s judgment appears to cut across that principle. The judgment will likely have adverse implications for all companies receiving JobKeeper, who are already reeling from the impacts of COVID.”
Will Qantas shares drop?
The Qantas share price hasn’t moved much, so it seems the market isn’t fazed. Overall, it seems this ruling won’t amount to that much so the market isn’t thinking it’s material.
Qantas is still facing difficulties relating to COVID-19 restrictions and a limited number of passengers. I wouldn’t want to buy shares because it’s hard to say when there will be a vaccine or a recovery. For that reason, there are other ASX growth shares I’d rather buy. For example, Pushpay Holdings Ltd (ASX: PPH) has much better growth prospects.