COVID-19 - JobKeeper Benefits - Updated Information for Employers & Employees
Earlier this year, Federal Parliament passed urgent amendments to the Fair Work Act 2009 (Cth) (the Act) to enable the JobKeeper program. This has given businesses essential flexibility in employing staff, enabling them to better cope with downturn in revenue during the COVID-19 pandemic.
JobKeeper has been a lifeline to businesses that otherwise would have struggled through the restrictions imposed by the Federal and State governments. In light of the ongoing nature of the pandemic, the JobKeeper payment has been extended beyond its original 28 September 2020 sunset date, albeit with some modifications.
However, the amendments to the Act enabling employers to stand down or otherwise vary the work of an employee are still scheduled to be repealed from 28 September 2020. It is unclear at this stage whether further amendments to the Act will be made by Parliament.
Businesses with turnover less than $1 billion that have suffered a reduction in turnover of at least 30% due to the pandemic, or businesses with a turnover of $1 billion or more that suffer a reduction in turnover of 50% will qualify for the Jobkeeper payment. Registered charities must have suffered a reduction in turnover of at least 15%.
The Australian Taxation Office (ATO) will continue to administer the JobKeeper payment.
The reduction in turnover may be established by comparing the business's turnover or projected turnover for the relevant month or three-month period with the corresponding period in the previous financial year. If the previous year's figures are not available (for example, if the business has been operating for less than a year) then the employer may seek that the ATO use its discretion to use alternative information to establish the reduction in turnover.
An employer may claim a JobKeeper payment in respect of an employee if the employee was, at 1 March 2020:
- at least 16 years old;
- an Australian resident for tax purposes;
- an Australian citizen, permanent visa holder or Special Category (Subclass 444) visa holder; and
- either a full-time, part-time, or long term casual employee.
The JobKeeper payment can be used to top up employee wages to ensure they receive $1,500 per fortnight, and if received in respect of an employee, must be passed on in full to the employee.
If, due to the employee's roster or hours worked, the employee would normally be paid more than $1,500 per fortnight, the employer may use the $1,500 received in respect of that employee in payment of the employee's wages.
These payments can be claimed by the employer up to 28 September 2020.
Update to JobKeeper from 28 September 2020
From 28 September 2020 businesses that seek to claim JobKeeper payments will need to reassess their eligibility for JobKeeper with reference to their actual turnover in the June and September quarters.
The payment rate will be changed as follows:
- From 28 September 2020 to 3 January 2021, the payment rate will be $1,200 per fortnight for all eligible employees who in the four weeks before 1 March 2020 were working in the business for more than 20 hours per week, and $750 per fortnight for employees who were working in the business for less than 20 hours per week in the same period.
- From 4 January 2021 to 28 March 2021, the payment rate will be $1,000 per fortnight for employees who in the four weeks before 1 March 2020 were working in the business for more than 20 hours per week, and $650 per fortnight for employees who were working in the business for less than 20 hours per week in the same period.
A key feature of JobKeeper is that employers can give directions to an employee (JobKeeper enabling stand down directions) which enable the employer to unilaterally reduce the employee's hours or stand them down entirely. This direction does not need the agreement of the employee. This brings certainty to an employer's ability to manage their business and staff.
Employers may also give directions to employees in respect of other matters, including in relation to:
- timing of work;
- location of work;
- taking leave (including taking periods of leave at half pay); and
- allocation of work tasks.
Limitations on power to give directions
Employers must comply with a number of rules when seeking to give JobKeeper enabling directions. In summary:
- the direction must be responsive to changes attributable to the pandemic or the government's initiatives to slow transmission;
- the employer must give the employee at least three days' written notice of the intention to give the direction;
- before giving the direction, the employer must consult with the employee and keep written record of the consultation;
- the employer can only give the direction if the affected employee cannot usefully be employed for their normal hours;
- the relevant direction must be reasonable in the circumstances;
- the employer must pass on the JobKeeper payment in full to the employee;
- the employee's rate of pay cannot be reduced;
- any work assigned to the employee must be able to be performed safely and within the employee's skills and competencies;
- either the employer or the employee may make an application to the Fair Work Commission to deal with any dispute in relation to the direction;
- any standing directions will automatically lapse on 28 September 2020.
Repeal of JobKeeper enabling directions legislation
The amendments to the Act that provide for JobKeeper enabling directions are scheduled to be automatically repealed on 28 September 2020. This means that after this date, employers will no longer be able to give directions under the JobKeeper legislation as set out above. It is unclear at this stage whether this end date for JobKeeper enabling directions will be extended.
Accruals of annual leave will continue as normal – that is, annual leave will accrue as if any direction had not been given. For example, if in accordance with a JobKeeper stand down direction an employee's weekly hours have been reduced from 38 hours to 20 hours, the employee will still accrue annual leave on the 38 hour basis as if the direction had not been given.
Redundancy pay, and payment in lieu of termination must still be calculated as if the direction had not been given.
Employers should be aware that they may be liable for civil penalties for knowingly giving any direction that is not authorised.
If you have queries about your abilities to manage your employees under the JobKeeper amendments to the FW Act, please contact James Francis, Senior Associate and Head of Employment Law.