The Australian Federal Parliament has passed legislation to give effect to the JobKeeper scheme that was announced on 30 March 2020.
The Coronavirus Economic Response Package (Payments and Benefits) Act 2020 and the Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020 include temporary amendments to the Fair Work Act 2009 to allow employers to change workplace arrangements and claim JobKeeper payments until business conditions improve.
The scheme is administered by the ATO. For the next six months, qualifying employers can claim a JobKeeper payment of $1,500 per fortnight for each eligible employee who was on the books on 1 March 2020 and who stays on the books. It is a flat amount for each full time or part time employee. Casuals need to have had regular work with the same employer for 12 months. Payments will be made on 1 May 2020, and backdated to 1 March 2020.
There are specific record-keeping requirements, and the Commissioner of Taxation has the power to make determinations about contrived schemes designed to maximise payment.
Temporary amendments to the Fair Work Act
Intended to enable employers to retain employees, the Fair Work Act amendments allow employers to direct employees to work fewer days or hours, or be stood down completely. Employees can be directed to work changed duties, work at different locations, and to take annual leave.
Employers and employees can also agree to change working hours and days, and to take annual leave, including at half pay, as long as the employee’s leave balance does not fall below two weeks. Any agreement to change the working hours must not reduce the hourly rate. An employee must not unreasonably refuse.
Consultation is required before any directions are given, and employers must give three days written notice of the intention to give a direction.
Directions (called “JobKeeper enabling directions”) must not be unreasonable, and changes to duties or location must be considered necessary to save employment. An employee does not have to comply with a direction if it is unreasonable.
The value of the JobKeeper payments must be passed on to employees. Employees must receive the greater of the JobKeeper amount or normal pay (the “Minimum payment guarantee”). In effect, if an employee continues working as normal, the JobKeeper payment acts as a wage subsidy for the employer.
There is also an “Hourly rate of pay guarantee”. Stand down and changed duties directions cannot reduce an employee’s hourly rate. If you have annualised salaries, you need to check award and enterprise agreement provisions about the base rate of pay.
During a JobKeeper enabling direction such as a stand down, the period counts as service, so that entitlements to leave, redundancy pay, and pay in lieu of notice are calculated as if the direction was never given. In the same way, an employee who agrees to take annual leave at half pay accrues entitlements as if the direction had not been given.
The Fair Work Commission can deal with disputes, including by arbitration.
Penalties apply, for example if an employer gives an unreasonable direction or breaks the Minimum payment guarantee.
There may be rules and regulations to follow about the detailed operation of the scheme. Under the legislation there will be an independent review from July, and the legislation automatically ends on 28 September 2020.
What it means for employers
If your business qualifies, these amendments allow an employer to make essential short term changes and to claim a wage subsidy to see the business through the crisis. You can register with the ATO here.
In normal circumstances, directions of this type could easily break the law.
But these are extraordinary times. While care is still needed, and consultation is essential, employers now have some flexibility to alter work arrangements to respond to the specific business impact of COVID-19.
In a separate but related matter, the Fair Work Commission decided yesterday to temporarily allow two weeks’ unpaid “pandemic leave” under 99 Modern Awards.
Does JobKeeper Payment apply to employees who have been made redundant?
No. However, it is possible to negotiate and agree to restore the employment relationship, repay any redundancy payments, and then claim the JobKeeper payment. Otherwise a redundant employee can claim the JobSeeker payment.
What is a “reasonable” direction?
What is reasonable depends on all the circumstances at the time, including the serious impact of the coronavirus on the business, and an employee’s particular personal circumstances.
To change duties or work location, an employer must have a reasonable belief, based on proper information, that the direction is necessary to save jobs.
The best way to address this is thorough consultation with all the employees affected.
This article is only a summary of the subject matter addressed, without the assumption of a duty of care by the firm. No person should rely on the contents as a substitute for legal or other professional advice.
If you need assistance regarding the workplace impact of COVID-19 please contact our firm on (02) 9267 4322, to speak to one of our lawyers.
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Disclaimer: This news alert provides a summary only of the subject matter covered without the assumption of a duty of care by the firm. No person should rely on the contents as a substitute for legal or other professional advice.