JobKeeper payment COVID-19 Fast Facts #2

JobKeeper Legislation: Second Fast Facts on JobKeeper Payment COVID-19 (this is the 2nd article relating to JobKeeper payment COVID-19 Fast Facts #1)

  • What is JobKeeper again? Are casual workers covered?
  • What is the eligibility test for business owners for JobKeeper?
  • Do business owners have to make superannuation contributions on JobKeeper payments, and what if a worker is not performing any work while receiving JobKeeper?
  • Is the scheme compulsory? Do business owners have to seek JobKeeper support for their workers?
  • Do changes made to the Fair Work Act 2009 affect all business owners?
  • Can participant business owners direct workers to change their work duties, or place of work?
  • Can participant business owners direct workers to change their work hours, or reduce their base rate of pay?
  • Can participant business owners stand down eligible workers, or reduce their hours of work?
  • Can participant business owners direct eligible workers to take annual leave while they are receiving JobKeeper?

The past week in context:

  • On 8 April the Federal Parliament passed the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 (first measure)and Coronavirus Economic Response Package Omnibus (Measures No.2) Act 2020 (second measure).
  • The first measure formally introduced the JobKeeper scheme providing wage subsidies of $1500 per fortnight for up to 6 million workers.
  • The second measure amended the Fair Work Act 2009(Cth) to enable eligible business owners to support greater flexibility to manage workers’ hours, location and duties. The Fair Work Commission also introduced phase 1 measures to 103 Modern Awards:
    • A new Schedule X was added– Additional measures during the COVID-19 pandemic – under section 157 of the Fair Work Act 2009.
    • These Awards were selected as the sectors that have been most adversely impacted by COVID-19.
    • Schedule X provides an entitlement to 2 weeks’ unpaid ‘pandemic leave’ and the flexibility to take twice as much accrued annual leave at half pay, by agreement with the employer.
    • Variation applications may still be made to vary modern awards to provide additional measures.
  • Importantly, the JobKeeper payment rules, which will outline the criteria for receiving the JobKeeper subsidy, has not yet been released but hopefully will soon, providing greater certainty.

We are now able to provide answers to many of the questions being asked by our business owner and worker clients about how these changes affect them.

Here are our clients’ top questions answered:

What is JobKeeper again? Are casual workers covered?

  • It is a wage subsidy payment of $1,500 (gross) per fortnight, available for up to 6 months to eligible workers, available to business owners seriously impacted by COVID-19.
  • For a more comprehensive re-cap, see First Facts JobKeeper article published on our website 1 April 2020.
  • Note that the legislation now confirms the position that only long term casual workers with more than 12 months’ service as at 1 March 2020 are eligible, which does include where there has been a transfer of business and service with the previous business owner.

What is the eligibility test for business owners for JobKeeper?

  • Your business must carry on business in Australia and not-for-profits must be principally based in Australia.
  • Your business must also have a reduction in GST turnover compared to a prior period as follows:
    • 30% for most eligible employers.
    • 15% for most charities – those registered with the Australian Charities and Not-for-Profit Commission (other than a school or university).
  • Businesses can apply if at a later time the turnover test is met, but payments won’t be backdated to the commencement of the scheme.

Do business owners have to make superannuation contributions on JobKeeper payments, and what if a worker is not performing any work while receiving JobKeeper?

  • No, Superannuation only has to be paid on Ordinary Time Earnings, and only when the worker is performing work. Nor does it have to pay superannuation on the top up amount where the worker is working reduced hours.
  • Superannuation does not have to be paid on the JobKeeper payment where the worker is not performing any work.

Is the scheme compulsory? Do business owners have to seek JobKeeper support for their workers?

  • No, business owners are not required to seek Jobseeker support for their workers.
  • It’s unclear however whether business owners are able to access the scheme for some but not all its workers.
  • There is no current provision in the recently introduced legislation for eligible workers to complain if their employer fails to claim. The JobKeeper payment rules made by the Treasurer could change this.

Do changes made to the Fair Work Act 2009 affect all business owners?

  • No. The changes only impact on the rights and responsibilities of business owners who are eligible and decide to participate in the JobKeeper scheme.

Can participant business owners direct workers to change their work duties, or place of work?

  • Yes. Changes made to the Fair Work Act 2009 permits participant business owners to direct workers receiving JobKeeper payments to work at a different location, and to perform different duties.
  • But duties must be within the worker’s skill and competency, the duties must be safe, the worker must have the appropriate license or qualification, and the duties must be within the scope of the ordinary business operations.
  • The change to location of work is only available if the place is suitable for the worker’s duties, does not require the worker to travel an unreasonable distance, and the place must be safe.

Can participant business owners direct workers to change their work hours, or reduce their base rate of pay?

  • Business owners can make changes to the day or days on which workers ordinarily work, while their workers receive JobKeeper payments.
  • Changes must be achieved by agreement rather than unilateral direction but a worker is not permitted to unreasonably refuse a reasonable request.
  • Under the “hourly rate of pay guarantee”, business owners cannot reduce worker’s base rate of pay.

Can participant business owners stand down eligible workers, or reduce their hours of work?

  • Section 524 of the FW Act already allows the stand down of workers without pay where there is a stoppage of work for reasons outside the business owners’ control. The new amendments provide a much broader and more flexible power to workers receiving JobKeeper.
  • Business owners can issue a “JobKeeper enabling stand down direction”, which allows business owners to direct its eligible workers:
    • To not work on a day or days the worker would usually work; or
    • To work for a lesser period than the period the worker would ordinarily work on a particular day or days; or
    • To work a reduce number of hours compared with the worker’s ordinary hours of work.
  • Written notice of intention to give the direction must be given to affected workers at least 3 days before the direction is given.
  • For such directions to be valid business owners must be able to demonstrate the stand down is not unreasonable, and also that the worker cannot be usefully employed for their normal days or hours during the JobKeeper enabling stand down period due to changes brought about by COVID-19 or government initiatives to slow the virus’ transmission.
  • Again, consultation obligations apply.

Can participant business owners direct eligible workers to take annual leave while they are receiving JobKeeper?

  • Technically, changes to the FW Act do not permit participant business owners to direct an eligible worker to take annual leave.
  • However, business owners can request eligible workers to take annual leave, as long as complying with this request does not result in the worker’s balance of paid annual leave being less than 2 weeks. It is important for workers to understand that they must consider any such requests from their employers, as workers cannot unreasonably refuse a request. Also note that consultation obligations do apply. So agreements can be made with workers about the days and times the worker is to work (without reducing their hours) or take annual leave, including on half pay.

Corney & Lind recommend you keep up to date with government advice and visit the department of Treasury’s website.

Note that these changes to the Fair Work Act do not operate to affect powers that may already exist under the National Employment Standards or an award or enterprise agreement or employment contract. This is why it is important to understand these changes within the context of the applicable instrument/s.

If you are a business owner and are unsure as to how to best protect your business or what your responsibilities are in any given situation, please contact our office for further advice.  If you are a worker and are unsure as to how to best protect your job or your income, please contact our office for further advice. We are offering a special discount for employees during this time.

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