|In response to the economic impact caused by the coronavirus the government recently announced the $130 billion JobKeeper scheme. The aim of this scheme is to help eligible employers keep eligible employees employed. In support of this aim, the Government has also provided JobKeeper eligible employers with increased flexibility via recent temporary amendments to the Fair Work Act 2009 (‘the Act’).|
|The following frequently asked questions have been prepared to help employers to understand the temporary changes to the Act.|
Who is eligible for the JobKeeper scheme and related payments?
The JobKeeper scheme is available to employers (including not for profits) who meet the following eligibility criteria:
• their business has an aggregated turnover of less than $1 billion (for income tax purposes) and they estimate their GST turnover has fallen or will likely fall by 30% or more because of the impact of COVID-19; or
• their business has an aggregated turnover of $1 billion or more (for income tax purposes) and they estimate their GST turnover has fallen or will likely fall by 50% or more; and
• their business is not subject to the Major Bank Levy.
For registered charities and not-for-profits, the relevant turnover reduction is 15%.
Employees of employers who meet the above-mentioned eligibility criteria are eligible for the $1,500 (before tax) fortnightly payment if the employee:
• is currently employed (including stood down or re-hired);
• is a full-time, part-time, or long-term casual (a long-term casual means a casual employee employed on a regular and systematic bases for more than 12 months as of 1 March 2020);
• was 16 years of age or older on 1 March 2020;
• was an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder on 1 March 2020;
• was a resident for Australian tax purposes on 1 March 2020; and
• is not in receipt of a JobKeeper Payment from another employer.
When does the JobKeeper scheme commence and end?
Jobkeeper payments are made in respect of each fortnightly period from 30 March 2020 to 27 September 2020. The first payment period will be between 30 March 2020 and 12 April 2020. With the last payment period being between 14 September 2020 and 27 September 2020. To coincide with the last payment period the JobKeeper related amendments to the Act will be repealed on 28 September 2020.
What is the minimum payment guarantee that an employer has to a JobKeeper eligible employee?
The recent temporary amendments to the Act include a minimum payment guarantee. Under this guarantee JobKeeper eligible employers must ensure that JobKeeper eligible employees receive no less than the greater of:
• the amount of the JobKeeper payment ($1,500 per fortnight before tax); or
• the amount payable to the employee for the performance of work, including loadings, bonuses, allowances, overtime, and penalties and leave payments.
Does the minimum payment guarantee still apply if the eligible employee would normally earn less than $1500 a fortnight?
What if the employee works their normal hours and duties and earns more than $1500 a fortnight?
The minimum payment guarantee would apply, that is they are entitled to be paid the amount payable for the performance of work, including loadings, bonuses, allowances, overtime, and penalties and leave payments, and the employer has a wage subsidy of $1500 for that employee to help fund the cost.
How does an employer calculate payment of wages when their payroll cycle does not align with the fortnightly JobKeeper payment cycle?
JobKeeper eligible employers are obligated to ensure that JobKeeper eligible employees are paid in accordance with the minimum payment guarantee. If the employers pay cycle does not align with the JobKeeper pay cycle the employer can allocate the JobKeeper payment between JobKeeper fortnights in a reasonable manner. This could include proportioning the JobKeeper payment to accommodate the employers usual pay cycle.
If a JobKeeper eligible employee works for another employer does this affect their JobKeeper entitlements with their current employer?
A JobKeeper eligible employee is, subject to the minimum payment guarantee, entitled to receive JobKeeper payments provided they are not receiving JobKeeper payments from another employer. Consequently, working for multiple employers does not disqualify an employee from receiving JobKeeper payments. However, a JobKeeper eligible employee can only receive JobKeeper payment from one employer.
If the hours of work of a JobKeeper eligible employee are maintained at normal levels, are they still eligible for JobKeeper payments?
JobKeeper eligible employers must ensure eligible employees receive the minimum payment guarantee. In the instance that the employee’s work is maintained at normal levels and this would amount to earnings greater than the JobKeeper payment, the minimum payment guarantee requires payment to be made for the performance of work, including loadings, bonuses, allowances, overtime, and penalties and leave payments. See minimum payment guarantee earlier in this document.
What is a job keeper enabling stand down?
The recent legislative amendments provide JobKeeper eligible employers with the ability to stand down employees who cannot be usefully employed because of factors attributable to the COVID-19 pandemic, or associated government initiatives to slow the transmission of COVID-19. JobKeeper enabling stand downs provide the employer with the ability to stand down an employee for all or part of their usual work hours.
What are the minimum guaranteed hourly rates that an employer must pay to an employee who is stood down?
If a JobKeeper eligible employee is stood down from all work, they must receive the full JobKeeper payment of $1500 per fortnight before tax.
If a JobKeeper eligible employee is subject to a JobKeeper enabling stand down for part of their usual work hours, the employer must ensure the employees hourly rate of pay is not less than the employees ordinary base rate of pay. However, if the employee’s total fortnightly earnings is then less than the JobKeeper payment ($1,500 per fortnight before tax) the minimum payment guarantee applies i.e. the employer must pay the employee $1,500 per fortnight before tax.
Do absences authorised by the employer impact on JobKeeper payments?
The above-mentioned obligations regarding JobKeeper enabling stand downs do not apply to any period where the employee is taking paid or unpaid leave or is otherwise absent from the workplace with the permission of the employer.
So, when an employee is away on a period of approved paid or unpaid leave, the JobKeeper rules – including the minimum payment guarantee – do not apply to them.
What if an employee is on a mixture of some work hours and on paid leave for the fortnight, so that their pay in a fortnight is made up of both a period of work and a period of paid leave?
Minimum payment guarantee applies.
How does a cash out of paid leave affect the payment guarantee and other JobKeeper rules?
Lawful cash out of paid leave will not affect the payment guarantee because the cash out payment is not a payment in respect of that fortnight, it is the cashing out of an employee’s entitlement. This is in contrast to where the employee takes the leave for that fortnight, where the payment for that fortnight is in accordance with the normal leave rules.
What rules attach to the taking of annual leave?
A JobKeeper eligible employer may request an employee to take paid annual leave, provided the request does not result in the employee having an annual leave balance of less than two weeks. The employee is obliged to consider the request and must not unreasonably refuse the request. Additionally, an agreement can be reached in writing for an employee to take twice the period of annual leave at half the normal rate of pay. Other than this, annual leave may be taken as normally taken by agreement between the employer and employee and in accordance with relevant industrial instruments.
If an eligible JobKeeper employee is already taking paid annual leave (whilst the JobKeeper scheme operates) as part of a stand down arrangement, can the employee apply to have their annual leave recredited?
The employee can apply to have their annual leave recredited however the employer has the right to refuse this request. Note this would most likely result in overpayment for the period the employee was on annual leave, a matter that would need consideration.
What duties can an employee be directed to perform?
JobKeeper eligible employers can direct a JobKeeper eligible employee to perform any duty within the scope of the employer’s operation provided the duties are safe to perform and the duties are within the employee’s skill and competency (JobKeeper enabling direction). In situations where a licence or qualification is required to perform those duties the employer must ensure that the employee has the appropriate qualification or licence.
Where an employee is subject to a JobKeeper enabling direction, what payment rules apply?
If an employee is provided with a JobKeeper enabling direction (i.e. directed to perform other duties within their skill and competence), the minimum guaranteed hourly rate that the employee is entitled to receive will be the greater of:
• the pay for the employee if they were doing their normal duties; or
• the pay applicable to the new duties as directed by the employer.
However, the total fortnightly payment cannot be less than the JobKeeper Payment of $1500 per fortnight before tax (See minimum payment guarantee).
Can an employee be directed to perform work at other locations?
JobKeeper eligible employers can direct a JobKeeper eligible employee to perform work from a location that is different to their normal workplace (e.g. the employee’s home). In all instances the directive to perform work at an alternate workplace must be safe and the travel to this new workplace must not be unreasonable in all the circumstances.
On what basis can an employer issue a direction to change an employee’s duties or location of work?
An employer may establish a sound basis to issue a direction to change duties or location if the employer had in its possession information that establishes on a reasonable basis that the directive was necessary to continue the employment of one or more employees of the employer.
Do employers need to consult with employees if they seek changes to duties or locations of work?
The employer must consult with the affected employee or their representative before giving the direction to change duties or to change the employee’s location of work. The employer is obliged to keep records of those discussions. Having undertaken consultation, the employer must provide the employee with three days written notice of the direction. This notice period can be shortened by mutual agreement between the employer and the employee.
What if the employee disagrees with a direction about duties or location of work?
A JobKeeper enabling direction concerning duties or location of work will be valid if it meets the criteria previously outlined. However, a JobKeeper enabling direction will be invalid if the direction is unreasonable in all the circumstances.
Is there a form for issuing a direction?
The Fair Work Regulations 2009 may prescribe a form for the purposes of recording directives concerning changes to duties and or location of work. However, at the time of writing, this form has not been prescribed by the regulations. Because such requests must be in writing we recommend that employers develop a template for recording JobKeeper enabling directions.
How long does this direction to change duties or work location last?
JobKeeper enabling directions remain in place until they are either withdrawn, replaced by a new direction given by the employer, or overruled by an order of the Fair Work Commission. In any case, a JobKeeper enabling direction ceases to have effect at the start of 28 September 2020.
Does the employee have to obey a JobKeeper enabling direction?
Unless the direction is unreasonable in all the circumstances, employees must comply with a JobKeeper enabling direction given by an employer. Failing to comply with a direction may, subject to investigation, result in disciplinary action up to and including termination of employment.
Does the period of a JobKeeper enabling direction count as service?
All periods concerning JobKeeper enabling directions count as service.
Can the employee or union dispute a direction to change location or duties?
Employees and employee organisations (unions) along with employers and employer organisations can lodge a JobKeeper related dispute using Form F13A. The Fair Work Commission (‘FWC’) may deal with a dispute using its usual means including arbitration. In dealing with the dispute, the FWC must consider the overall fairness between the parties. The FWC may make orders it considers desirable to give effect to a JobKeeper enabling direction. Any orders made by the FWC in relation to the JobKeeper provisions of the Act cease to have effect at the start of 28 September 2020.
Do the JobKeeper legislative changes provide flexibility regarding when employees can be required to work?
A JobKeeper eligible employer may make a written request to a JobKeeper eligible employee to work on different days of the week and or different times of the day provided the request is safe and reasonably within the scope of the employer’s normal operation.
The employee must consider this request and must not unreasonably refuse the request. The effect of any agreement reached under this provision must not reduce the employee’s normal ordinary working hours. Any agreement reached becomes enforceable for the duration of the JobKeeper scheme.
Do the above JobKeeper provisions override any corresponding provisions in an industrial instrument?
Yes, to the extent of the JobKeeper provision only.
Require further information/assistance? If you require further information or advice, please contact one of our consultants.