NOTE: We have a new COVID-19 Pack available for all Client Members from the HR Docs tab of your online account (click on HR Docs, Document Builder and then scroll down to General Documents).
The Fair Work Act has been amended to cater for the introduction of the JobKeeper Wage Subsidy, and although overriding any modern award, enterprise agreement or employment contract, these changes will only apply to an employer and employee that have been approved (and continue to be approved) under the JobKeeper Scheme.
NOTE: Although this article seeks to summarise the new changes, there are still some details that have yet to be finalised by the Government.
SUMMARY
Under the changes, an employer can give a direction to an employee (JobKeeper direction):
- requiring the employee to stand down without pay (completely or partially) for any period that the employee cannot be usefully employed
- making changes to employment arrangements for an employee, such as changes to the work to be performed, working days of the week and work location.
JOB KEEPER WAGE SUBSIDY
1. What is the JobKeeper wage subsidy?
The JobKeeper wage subsidy is a $1,500 fortnightly payment to subsidise wages of eligible employees.
To be eligible, employers must have a revenue reduction of 30% or more to and they are able to register with the ATO to apply for the subsidy (currently, employers can register their interest at the ATO Job Keeper webpage).
Some Fact Sheets from the Treasury can be accessed below:
FAQs JobKeeper
Supporting Businesses
Information for Employers
STAND DOWN
2. What are the new Stand Down provisions?
An employer will be able to give a direction to an employee to:
- Not work on a day or days on which the employee would usually work.
- Work for a lesser period than the period which the employee would ordinarily work on a particular day or days.
- Work a reduced number of hours (compared with the employee’s ordinary hours of work),
and not be paid for the period that work is not performed.
The above rights of the employer are available provided that:
- The stand down direction is reasonable in all the circumstances.
- For the period of the stand down, the employee cannot be usefully employed for the employee’s normal days or hours because of changes to business attributable to the COVID-19 pandemic or Government initiatives to slow the transmission of COVID-19.
- The implementation of the stand down direction is safe (specifically having regard to the nature and spread of COVID-19).
- The employer qualifies for the JobKeeper scheme and becomes entitled to one or more payments under the Scheme for the employee for the period that the JobKeeper direction applies, and the employer complies with all of the rules of the Scheme.
- If a JobKeeper payment is payable to an employer for an employee for a fortnight, the employer must ensure that the total amount payable to the employee (which includes incentive-based payments / bonuses, loadings, monetary allowances, overtime / penalty rates, leave payments) in respect of the fortnight is not less than the greater of the JobKeeper payment of $1,500 or the remuneration payable to the employee for work performed.
- The employee’s normal hourly wage rate is not reduced (some exceptions apply).
How do I know an employee cannot be usefully employed?
This situation arises when an employee has no (or a reduced level of) useful work available to perform because of the COVID-19 pandemic / Public Health Orders and Directions (however described in each State and Territory) imposing restrictions on individuals and businesses.
Useful work does not have to be the work that the employee ordinarily performs but needs to be genuine productive work that provides a “net benefit” to the employer.
You should be able to demonstrate that the impacts of the virus or the Government’s measures to deal with it have caused the fact that there is none, or less useful, work available.
When does a stand down direction not apply?
A stand down direction does not apply to the employee during a period when the employee is taking paid or unpaid leave that is authorised by the employer, or otherwise authorised to be absent from the employee’s employment.
Example: Stood down for 20 hours, JobKeeper is less than normal pay
Henry usually works full-time, 38 hours a week (76 hours a fortnight). His employer qualifies for the JobKeeper scheme and is receiving payments of $1,500 for Henry each fortnight.
Due to coronavirus, as there is only 18 hours of work to perform per week (36 per fortnight), Henry’s employer can’t usefully employ him for the remaining 20 hours a week. His employer uses the new JobKeeper stand down provisions to stand Henry down for the 20 hours. Henry continues to work 18 hours a week.
Henry is usually paid $2,000 (before tax) a fortnight for 76 hours of work. For 36 hours, his pay would normally be $947 (before tax). Under the JobKeeper scheme Henry’s employer has to pay him the full $1,500 (before tax) for the fortnight but doesn’t have to pay any more than that.
Example: Stood down for all hours, JobKeeper is more than normal pay
Carly usually works part-time, 15 hours a week (30 hours a fortnight).
Due to coronavirus, there is no work for Carly. Her employer stands her down under the new JobKeeper enabling stand down provisions. Her employer qualifies for the JobKeeper scheme and is receiving payments of $1,500 for Carly each fortnight.
Carly is usually paid $1,000 (before tax) a fortnight for 30 hours of work. Under the JobKeeper scheme Carly’s employer has to pay her the full $1,500 (before tax) for the fortnight.
CHANGES TO EMPLOYMENT ARRANGEMENTS
3. What changes can be made to an employee’s employment arrangements?
A. An employer can direct an employee to perform different duties, provided that:
- the duties are within the employee’s skill and competence.
- the employee holds any necessary licence or qualification required to perform the duties.
- the duties are reasonably within the scope of the employer’s business operation.
- the duties to be performed are generally safe (specifically having regard to the nature and spread of COVID-19).
B. An employer can direct an employee to perform duties at a place different to their normal workplace (including the employee’s home), provided that:
- the place is suitable for the employee’s duties.
- the performance of the duties at that place is reasonably within the scope of the employer’s business operation.
- the duties to be performed are generally safe (specifically having regard to the nature and spread of COVID-19).
The ability of an employer to give either or both of the above directions only applies if the direction is reasonable in all the circumstances, and if it is necessary to maintain the employment of the employee (based on information available to the employer).
Example: Direction to change usual duties
Oliver is employed full-time as a leading hand in a Sydney warehouse business. The warehouse business is affected by coronavirus and qualifies for the JobKeeper scheme.
Given the downturn in business, Oliver’s employer no longer needs Oliver to perform his leading hand duties. Instead, Oliver is directed to carry out forklift driving duties temporarily. Oliver’s employer is able to make this direction under the JobKeeper change of duties provisions because:
- Oliver has experience driving forklifts and holds the appropriate licences
- the driving duties are safe and can be performed with appropriate social distancing measures in place
- the driving duties are within the scope of the warehouse’s business.
While this change of duties is in place, Oliver’s other employment conditions (such as hours and days of work) haven’t changed.
CONSULTATION
4. What are the consultation obligations?
Before a JobKeeper direction is given, the employer must:
- give the employee written notice of the intention to give the JobKeeper direction at least three days before the JobKeeper direction is given or a lesser period if agreed with the employee.
- consult with the employee (or a representative of the employee) about the direction.
The written notice may be required to be in a specific form – this is not yet clear.
OTHER QUESTIONS
5. Must an employee follow a JobKeeper direction?
Yes. If a JobKeeper direction is given by an employer, the employee must comply with the direction.
6. What happens if there is a dispute between an employer and employee?
The Commission now have very broad powers to deal with a dispute, including being able to make a direction, set aside a direction, substitute a direction, and make any other order it considers appropriate.
NEW COVID-19 PACK
Our new Pack is available from the HR Docs tab of your online account, and contains the following:
- Mutual Agreement to Change Ordinary Hours of Work
- Mutual Agreement to Reduce Remuneration
- Mutual Agreement to Convert to Casual Employment
- Mutual Agreement to take Annual Leave
- Mutual Agreement to take Unpaid Leave
- Direction to Stand Down
- Cessation of Stand Down period
- JobKeeper Direction
