Last night, 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 today.
The Fair Work Commission (FWC) yesterday also varied another 99 awards to provide for unpaid pandemic leave and the ability to take annual leave at half pay.
JobKeeper Scheme
The Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020 and the Coronavirus Economic Response (Payments and Benefits) Act 2020 (Acts) operate together to introduce the JobKeeper scheme which is designed to provide financial support to business affected by COVID-19. The Acts contain no detail regarding eligibility or the mechanics of how the scheme will work but rather provide for this to be detailed in Rules which are yet to be made by the Treasurer. Until those Rules are released, the best guidance we have are the Treasury fact sheets. Employers should be cautious about making decisions until the Rules are made, which we expect to be in the coming days.
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
Award variations
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 2010 Award (and two other industry awards) 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.
Further information
An updated version of the FAQ document we previously circulated is available here.
We will continue to keep clients updated once more information becomes available including much-needed detail and clarity in the Rules and Regulations. This is likely to include clarity about how to deal with employees who have already been stood down and the interaction between the FW Act amendments and the existing FW Act stand down provisions.
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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