The “JobKeeper Payment” wage subsidy program announced by the Federal Government on 30 March 2020 has received an unprecedented response with more than 700,000 businesses registering their interest so far and the Treasurer now estimating that up to half of the Australian workforce may receive a JobKeeper Payment over the next six months.
A summary of those announcements by our specialist employment law team is available here.
Legislation passes implementing JobKeeper Payment scheme
On 8 April 2020, the Federal Parliament passed legislation to implement and regulate the JobKeeper Payment scheme.
The legislation provides a framework for the Treasurer, Josh Frydenberg, to make the necessary rules administering and governing the JobKeeper Payment scheme which will generally be administered by the Tax Commissioner. Those rules have not yet been released, although it is anticipated that eligibility requirements and the amount and timing of payments under the scheme will not change from what was previously announced.
The legislation also significantly amends the Fair Work Act 2009 (Cth) to support the practical operation of the scheme by providing employers with significant temporary powers to implement flexibility measures.
Employers who are eligible for the Jobkeeper payment will now be able to issue a range of directions to eligible employees. Any directions given will remain in effect until 28 September 2020 (unless withdrawn earlier by the employer).
Employers should exercise caution before issuing any directions to employees to ensure they are legally entitled to receive JobKeeper payments, and should obtain expert advice if they are in any doubt about their likely eligibility because civil penalties will apply if unauthorised directions are given.
Direction to reduce employee working hours
Employers will be able to give a direction to employees to reduce their working hours (including to zero) if they cannot be usefully employed for their normal days or hours of work due to COVID-19 or government initiatives to slow the transmission of the virus.
Direction to change duties or work location
Employers will be able to direct an employee to:
Request to change days of work
Employers will also have a right to request that an employee agree to work on different days or at different times to those usually worked. Provided that the overall effect of the change will not be to reduce the employees’ number of hours of work, an employee cannot unreasonably refuse to enter into such an arrangement.
Notice and consultation requirements
Before issuing a direction an employer must generally provide at least 3 days notice and engage in consultation with the employee.
Protections for employees
The new legislation provides a number of safeguards for employees, including that the direction not be unreasonable in all the circumstances and that it be necessary to continue the employment of one or more employees of the business (which need not be or include the employee receiving the direction).
Further, an employer will contravene a civil penalty provision where it purports to give a jobkeeper enabling direction which is not properly authorised under the legislation and the employer knew that this was the case which can carry a maximum penalty of $63,000 for companies and $12,600 for individuals.
The period that a direction is in effect will count as service and employees who are subject to a direction will continue to accrue leave entitlements as if the direction had not been given. Redundancy pay and notice of termination will also be calculated as if the direction had not been given.
Right to agree to take annual leave at half pay extended to award free employees
The legislation also amends the Fair Work Act to introduce a right for employers to request that an employee take twice as much annual leave at half pay. Provided that the employee’s remaining leave balance will not be less than two weeks, an employee cannot unreasonably refuse to agree to such an arrangement.
For a discussion of similar amendments made recently by the Fair Work Commission to 99 modern awards see our related article here.
JobKeeper – what do we know?
As discussed in our previous article, the Federal Government’s announcement of the JobKeeper scheme raised a number of questions as to how the scheme will operate in practice, including how payments passed on to employees would interact with existing contractual and legislative entitlements.
The Federal Government has since clarified that:
South Australian businesses will also be relieved with the South Australian Treasurer’s announcement that business will be exempt from paying any payroll tax on the JobKeeper Payment.
Outstanding issues and where to from here
At this stage, a number of issues remain unclear:
The amendments to the Fair Work Act will likely come into effect very shortly and will operate until 28 September 2020.
We anticipate that the release of the JobKeeper payment rules will provide further clarity on how the scheme will operate.
For further advice on how these changes will affect your business, please contact our specialist employment law team.
This article provides general comments only. It does not purport to be legal advice. Before acting on the basis of any material contained in this article, we recommend that you seek professional advice.
Paul Dugan, Principal in our Disputes Team
Direct Telephone: +61 8 8210 2266
Kylie Dunn, Senior Associate in our Disputes Team
Direct Telephone: +61 8 8210 2286