The COVID-19 pandemic has had a drastic impact on the Australian economy. The Australian Federal Government has implemented schemes such as the JobKeeper wage subsidy in response to the pandemic in order to preserve the employer-employee relationship and keep businesses and employees in work.

On the afternoon of 1 September 2020, the Coronavirus Economic Response Package (JobKeeper Payments) Amendment Bill 2020 passed the Federal Parliament. The Bill extends the JobKeeper payment scheme and the temporary JobKeeper provisions that are currently contained in the Fair Work Act 2009 (Cth) (Act). The changes have been extended until 28 March 2021, however, will be subject to certain amendments, which include:

From 28 September 2020 through to 3 January 2021

The payment rates for JobKeeper will be:

  1. $1,200 per fortnight for eligible employees and business participants who worked 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020 (whichever is higher); or
  2. $750 per fortnight for other eligible employees and business participants;

From 4 January 2021 to 28 March 2021

The payment rates will be:

  1. $1,000 per fortnight for eligible employees and business participants who worked 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020 (whichever is higher); or
  2. $650 per fortnight for other eligible employees and business participants.

From 28 September 2020

In addition, the effect of the amendments is that there are now two broad categories of employers who can access the particular flexibilities under the Act in certain circumstances:

  1. employers who are eligible for JobKeeper payments after 28 September 2020 (Qualifying Employers); and
  2. employers who received one or more JobKeeper payments in the period prior to 28 September 2020, but no longer qualify for payment after 28 September 2020 (Legacy Employers).

Qualifying Employers

Employers who qualify for JobKeeper 2.0 (i.e. qualify from 28 September 2020) can continue to issue JobKeeper enabling directions to employees to work reduced hours or days, undertake alternative duties, or to work at an alternative location, or request an employee to work different days/times to their ordinary hours.

The flexibilities relating to annual leave (i.e. the employers right to request an employee to take annual leave or for the employer and employee to enter into an agreement to take annual leave at half pay) will be repealed at the start of 28 September 2020. Accordingly, if an employee has been given a request under the JobKeeper provisions of the Act, with respect of annual leave, the employee is not required to comply with the request to the extent that the request relates to taking paid annual leave beyond 27 September 2020. Further, under JobKeeper 2.0, employers can no longer request employees to take annual leave.

If any JobKeeper enabling directions have been issued or agreements entered, except those relating to annual leave, they will automatically carry over from 28 September 2020 if the employer remains eligible to give the direction or make that agreement. All employers should review the notices provided to employees to ensure that they are capable of automatically rolling over. If not, they may need to be re-issued to the employee.

Note that the consultation requirements have not been amended and the same consultation process must be followed by employers (i.e. giving the employee at least 3 days written notice before the employer gives a JobKeeper direction or a lesser period if agreed).

Changes to the requirements of an employee to follow a JobKeeper direction

Under JobKeeper 1.0, employees are required to comply with a JobKeeper direction unless the direction is unreasonable in all the circumstances. This has been amended under JobKeeper 2.0 insofar as if directions relating to the reduction of hours are given, the direction may be unreasonable if the direction has an unfair effect on some employees in the same category when compared to other employees in that category who are also subject to those directions. If the direction is unreasonable, it does not apply to an employee.

What is a Legacy Employer?

A Legacy Employer is an employer who qualified for JobKeeper 1.0 but will not qualify for JobKeeper 2.0, however, these employers are still able to show at least a 10% decline in turnover and are thereby entitled to access some modified workplace flexibilities for their employees who previously received JobKeeper payments. Legacy employers must prove at least a 10% decline in turnover in relevant quarters in 2020 compared with 2019. In order to do so, businesses will be required to obtain a 10% decline in a turnover certificate from a financial services provider or if they choose to, self-certify where the employer is a small business with less than 15 employees. After originally qualifying on 28 September 2020, Legacy Employers must obtain a 10% decline in a turnover certificate or self-certify for each subsequent quarter in order to continue to be eligible for using the Act’s flexibilities. The first day of each subsequent new period requiring a certificate is 28 October 2020 (September quarter certificate required) and 28 February 2021 (December quarter certificate required). Prior to these dates, employers must notify employees as to whether a direction/request currently in operation will either continue to apply or will cease to apply.

Legacy employers can give employees who previously received a JobKeeper payment:

  1. directions to change their current employee arrangements which require the employee to:
  • work reduced hours or days (no less than 60% of ordinary hours as at 1 March 2020 and no less than 2 consecutive hours in a day);
  • work in an alternative location; or
  • undertake alternative duties;
  1. request the employee to work different days/times (this request cannot be unreasonably refused by the employee).

These directions can only take effect for a period beginning on or after 28 September 2020. These flexibilities differ substantially from those provided to Qualifying Employers so it is critical that employers understand the difference between such directions.

Consultation Requirements

A direction given by a Legacy Employer will not apply to an employee unless the employer provides notice and takes the following steps to consult at least 7 days before the direction is to be given and keeps a written record of the consultation:

  1. provide written notice of the employer’s intention to give the direction;
  2. provide the employee or their appointed representative (if any) with information about the proposed direction; and
  3. invite the employee or their appointed representative (if any) to give their views about the impact of the proposed direction on the employee.

There is no entitlement for a Legacy Employer to direct the taking of annual leave unless the applicable industrial instrument provides for this (in which case the industrial instrument must be followed).

This summary is a guide only and is not legal advice. For more information on legislative obligations, please call CTI Lawyers on 02 9021 9699 or email [email protected].  

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