Insights

The JobKeeper Payment: Changes to the Fair Work Act

Workplace Relations & Safety

In our previous update regarding the announcement of JobKeeper, we noted that without legislative change it would still be necessary for employees to agree to measures to support JobKeeper, such as working reduced hours. The most significant aspect of the amendments to the FW Act is that qualifying employers will be able to require changes to employees' hours of work, annual leave arrangements, performance of duties and location of work and days and times of work. The intention of these changes is to provide employers who are eligible to participate in the scheme with maximum flexibility to make changes without resorting to redundancies.

In this update, we provide an overview of these and other key changes to the FW Act made by Federal Parliament yesterday. There is much left unsaid by the legislation, which will be dealt with in Rules to be published shortly. We will update you further when that occurs.

Changes to employer eligibility

As detailed in our previous update, it was announced that JobKeeper would apply to employers who experience a 30% reduction in turnover or a 50% reduction if their annual revenue is over $1 billion.

The final legislation has provided the Treasurer with a broad discretion to vary eligibility requirements without needing to recall Parliament. Employers will be watching closely for any broadening of the scheme.

Further, the legislation provides for a lower threshold for charities registered with the Australian Charities and Not-for-profits Commission, only requiring a 15% decline in their turnover before they will be eligible for JobKeeper.

Employer payment obligations

An employer who is entitled to a JobKeeper payment must pay a sum equal to or exceeding $1,500 a fortnight to the eligible employee.

The employer must pay the employee by the end of the fortnight.

While an employer will have flexibility to reduce an employee's hours and change their duties (see further below), they will not be entitled to change an employee's existing base rate of pay.

Increased stand down options

Employers who qualify for the JobKeeper scheme will be able to give a stand down direction to employees to:

  • not work on particular days which the employee would usually work; or
  • work fewer hours than the employee would ordinarily work (including nil hours); or
  • work for a lesser period than the period which the employee would ordinarily work on a particular day or days.

To give a stand down direction, employers must establish that the employee cannot be usefully employed for their normal days or hours due to changes to business attributable to:

  • the Coronavirus pandemic; or
  • government initiatives to slow Coronavirus transmission.

The direction must be implemented safely, having regard to the nature and spread of Coronavirus.

A JobKeeper enabling stand down direction does not apply while an employee is taking paid or unpaid leave.

Other than receiving at least the amount of the JobKeeper payment, an employee will not be entitled to wages while a stand down direction is in effect.

Flexibility to vary duties, location and days of work

Employers who qualify for the JobKeeper scheme may make directions or agreements altering an employee's duties, location and days of work.

Duties

An employer may direct an employee, for the duration of the time they are receiving the JobKeeper payment, to undertake different duties if:

  • the duties are safe (having regard to the Coronavirus);
  • the duties are within the employee's skill and competency;
  • the employee is licensed and qualified to perform the duties; and
  • the duties are reasonably within the scope of the employer's business operations.

An employee is not required to comply with a direction to change of duties of work if it is unreasonable.

Location

An employer may direct an employee for a period to perform duties at a place that is different from the employee's normal workplace if:

  • the place is suitable for the employee's duties;
  • if the place is not the employee's home – it does not require the employee to travel an unreasonable distance;
  • performance of the employee's duties at the place is safe, having regard to the Coronavirus.

A direction to change work location will not apply if it is unreasonable.

Timing/days of work

An employee and employer may make an agreement that the employee perform work on different days or at different times during a period, compared with the employee's ordinary days or times of work if:

  • performance of duties on different days or times is safe;
  • it is reasonably within the scope of the employer's business operations; and
  • the agreement does not reduce the employee's number of hours of work compared with the employee's ordinary hours of work.

An employee must consider and must not unreasonably refuse the employer's request for agreement to the changed arrangements.

Taking paid annual leave

Employers who are participating in JobKeeper may request employees to take annual leave and to do so at half pay.

The employee must consider and must not unreasonably refuse their employer's request to take annual leave, including if the request is for them to take leave at half pay.

However, employees will be entitled to insist that they retain at least two weeks of accrued annual leave.

Requirements for JobKeeper directions

The JobKeeper directions outlined above must:

  • not be unreasonable in the circumstances;
  • give the employee at least three days' written notice of the intention to give a direction;
  • only be given following consultation with the employee, which must be recorded in writing; and
  • give the direction in writing to the employee.

An employer making a direction to an employee to change duties or location of work must also provide information to support a reasonable belief that the direction is necessary to continue the employment of one or more employees.

The direction will continue in effect until withdrawn or revoked by the employer, replaced by a new direction from the employer, under a Fair Work Commission order within its jurisdiction under the scheme, or on 28 September 2020.

Employees must continue to accrue all service related entitlements, including paid leave, as normal despite any JobKeeper direction that is in place.

Jurisdiction of the Fair Work Commission

The Fair Work Commission (FWC) will have jurisdiction to deal with disputes arising under the new JobKeeper provisions.

The FWC is permitted to make:

  • an order it considers desirable to give effect to a JobKeeper enabling direction;
  • an order setting aside, or substituting, a JobKeeper enabling direction;
  • any other order it considers appropriate.

The FWC's jurisdiction to deal with disputes under these provisions will cease 28 September 2020.

All information on this site is of a general nature only and is not intended to be relied upon as, nor to be a substitute for, specific legal professional advice. No responsibility for the loss occasioned to any person acting on or refraining from action as a result of any material published can be accepted.

Key
Contacts

Angela Xu

Angela Xu

Graduate