On 8 April 2020, the Parliament passed legislation to give effect to the Government’s JobKeeper scheme and to amend the Fair Work Act 2009 (Cth) (FW Act) to give eligible employers greater flexibility to modify employees’ working hours, days, duties and location to minimise the impact of the COVID-19 pandemic on their business and seek to preserve jobs.
The legislation became law after receiving Royal Assent on 9 April 2020.
The Fair Work Commission (FWC) also varied another 99 awards to provide for unpaid pandemic leave and the ability to take annual leave at half pay.
The Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020 (Cth) and the Coronavirus Economic Response (Payments and Benefits) Act 2020 (Cth) (Acts) operate together to introduce the JobKeeper scheme which is designed to provide financial support to business affected by COVID-19.
The Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Rules) contain details regarding eligibility and the mechanics of how the scheme works. Under the Rules, an employer is entitled to a JobKeeper payment for a fortnight provided they qualify for the scheme on or before the end of a fortnight which falls within the period from 30 March 2020 to 27 September 2020. The employer, on 1 March 2020, must have carried on a business in Australia or been a non-profit body principally pursing its objectives in Australia. The employer must pay the eligible employees (as defined in the Rules) before receiving the JobKeeper payment ($1,500 per fortnight).
In addition, the employer must have met the relevant “decline in turnover test” before the end of the fortnight. This test compares the projected GST turnover of the entity for a period with its current GST turnover as calculated for a relevant comparison period. Even if the turnover later improves during the 6-month period, the employer will remain eligible for the JobKeeper payment. The Rules allow the ATO Commissioner to establish by legislative instrument an alternative method of assessing the decline in turnover where there is not an appropriate relevant comparison period in 2019, for example in the case of a new business.
The Rules specify that the JobKeeper scheme starts on 30 March 2020 and ends on 27 September 2020.
JobKeeper amendments to Fair Work Act
The Coronavirus Economic Response Package Omnibus (Measures No.2) Act 2020 amends the FW Act by introducing new flexibilities for employers who are eligible for the JobKeeper scheme, including the ability to:
- Stand down employees (for some or all of their normal hours) if they cannot be usefully employed for their normal days/hours of work due to the impact on the business of COVID-19
- Direct employees to perform alternative duties that are safe and within their skill level and competence
- Direct employees to work from another location provided it is safe
- Vary an employee’s days/times of work by agreement
- Request employees to take annual leave, which employees must not unreasonably refuse, subject to the employee retaining a 2 week balance
- Agree to employees taking annual leave including at half pay
These provisions operate from 9 April 2020 and they have a sunset date of 28 September 2020.
To rely on these provisions, employers must:
- be eligible for the JobKeeper scheme and comply with the requirements of that scheme, including to pay eligible employees at least $1,500 per fortnight or the amount payable for work performed by the employee in the fortnight (whichever is greater);
- be able to demonstrate that directions given are ‘reasonable’ (not defined)
- be able to demonstrate that directions to vary duties/location are necessary to maintain continuing employment
- give employees at least 3 days written notice of a direction (Note: Regulations, yet to be released, may prescribe a form)
- genuinely consult with employees/their representatives before giving directions and keep records of this.
Other safeguards include:
- employees’ normal hourly rates cannot be reduced, unless by agreement
- employees cannot be stood down during a period of paid or unpaid authorised leave/absence e.g. annual leave
- the FWC will have the power to hear and settle disputes regarding directions given
- penalties for breaches/misuse of these provisions by employers
- protection of employees against adverse action when exercising workplace rights under these provisions.
On 8 April 2020, a Full Bench of the FWC varied 99 Modern Awards by inserting the new “Schedule X – Additional measures during the COVID-19 pandemic”. This sets out an entitlement to two weeks’ unpaid “pandemic leave” for employees who are required to self-isolate (but who are not entitled to take paid leave) and the flexibility to take annual leave at half pay. Schedule X will operate from 8 April 2020 to 30 June 2020.
The FWC recently also varied the Clerks – Private Sector Award 2010 (and the Hospitality Industry (General) Award 2010 and Restaurant Industry Award 2010) on a short term basis in response to the pandemic, including to enable employers to direct employees to take annual leave on 1 weeks’ notice provided they retain a balance of at least 2 weeks and introducing measures to facilitate reductions in working hours of full time and part time employees. Read more about the FWC changes here and the changes to the Hospitality Award here.
For employers who are eligible for the JobKeeper scheme, these award variations are likely to be superseded by the FW Act amendments referred to above.
An updated version of the FAQ document we previously circulated is available here.
If you would like to discuss how these developments impact your business or assistance with managing your workforce in response to the pandemic, please contact a member of our Workplace Relations Team.
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