Virgin Australia sends staff on leave to access JobKeeper
Australia’s second-largest airline has admitted hundreds of its employees have been put on extended leave – possibly costing the government millions in JobKeeper payments – despite there being little prospect of them returning.
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Hundreds of Virgin Australia staff who no longer have a job at the airline will be kept on its books until March so they can access thousands of dollars in JobKeeper payments.
Virgin Australia, Queensland’s hardest-hit company during the COVID-19 pandemic, has cut its workforce by 3000 and kept 4550 more employees stood down due to low travel demand.
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In September and October hundreds of Virgin workers, including operations, flight and head office staff, were told they no longer had a job at the carrier.
They were given the option of leaving the business with a redundancy or remain employed and take extended leave – allowing them to access JobKeeper and be redeployed if a role became available.
However, some staff on leave have been urged to look for other work due to the low chance of redeployment.
Employees who are not redeployed within the airline before March or April, when JobKeeper ends, will be made redundant.
About 1700 workers left the carrier in September and October and it is understood hundreds more elected to take leave.
The airline did not reveal how many workers went on leave without pay – but analysis reveals it could cost the government millions in JobKeeper payments.
One Virgin Australia worker who spoke to The Courier-Mail on the condition of anonymity said they were “definitely” made redundant but told their last day at the carrier would be in March.
The worker said they continued to receive $1200 per fortnight in JobKeeper payments despite their job effectively ending.
A Virgin Australia spokeswoman confirmed workers on extended leave could continue to receive JobKeeper payments “as they remain employed during this time”.
“This is consistent with the rules and guidance for the JobKeeper scheme which permit employees on unpaid leave to receive payments,” she said.
“We continue to liaise directly with the government on all aspects of the JobKeeper scheme.”
Griffith University Economics Professor Tony Makin said JobKeeper could deter stood down employees from finding new work.
“It is propping up the economy falsely because those people will not be gainfully employed in the future,” he said.
“There are jobs being created in other areas as restrictions are lifted and it’s a disincentive to gain full employment.
“Those firms, who are effectively zombie firms who have employees that will not be employed beyond March, are a drain on the economy.”
An Australian Taxation Office spokeswoman did not speak about Virgin Australia, however, said the eligibility of JobKeeper “depends on the facts of the specific case”.
“The JobKeeper Payment is only available for eligible employees,” she said.
“Once they are no longer employed, their employer is not able to claim the JobKeeper Payment in respect of them.
“Therefore if they have been made redundant, the employer is no longer able to claim the JobKeeper Payment for them.”
