Last night, the Jobkeeper legislation passed through both houses of the Federal Parliament, and we now have our first non-speculative insight into what employers are able to do, and what they are required to do, if they are eligible employers for the purposes of the Jobkeeper payment.
However, what is clear from our first assessment of the legislation, is that application and compliance is very reliant on the ‘yet to be released’ Jobkeeper Payment Rules (‘Rules’) for interpretation of some of its key provisions, including who will be an eligible employer. The Rules are expected to be finalised in the next few days.
For now, and subject to what the Rules will say, this is what we know:
There is a wage condition
An eligible employer must satisfy a ‘wage condition’ to be eligible for the payment. The ‘wage condition’ is to be defined by the Rules.
Note. Whilst we are not yet certain, the legislation wording is structured such that the wage condition will confirm that for an employer to be eligible to receive the JobKeeper payment for an eligible employee, the employee must have been paid by the employer in the fortnight for which the payment is to be made. That is, employers will not simply be able to pass on the payment when it is received. Please note that this is a preliminary view only, and we are waiting on the Rules to confirm this view.
There is a minimum payment requirement
To be eligible for the payment, an eligible employer will be required to provide a minimum payment each fortnight – which is to be the greater of either the employee’s current pay or $1,500 gross. This position appears to apply whether the employee is full-time, part-time or an eligible casual employee.
Employers can issue directions
Eligible employers will be able to issue ‘Jobkeeper enabling directions’ to eligible employees. These directions include:
- A Jobkeeper enabling stand down direction (‘Stand Down Direction’), which is a direction to an employee that the employee:
- not work on a day or days on which the employee would usually work; or
- work for a lesser period than the employee would usually work; or
- work a reduced number of hours (including to nil).
A Stand Down Direction can be given so long as:
- the employee cannot be usefully employed for their normal days and hours because of changes to business attributable to the COVID-19 pandemic or related government initiatives; and
- the employer becomes entitled to 1 or more Jobkeeper payments for the Jobkeeper stand down periods;
- the direction is safe (including with regard to the COVID-19 situation);
- the accrual of leave entitlements will continue as if the direction had not been given;
- the calculation of redundancy payments and payments in lieu of termination will be as if the direction had not been given.
- A direction regarding the duties an employee is to perform – so long as:
- those duties are within the employee’s skill and competency;
- those duties are safe (including with regard to the COVID-19 situation);
- those duties are reasonably within the scope of the business operations;
- the employee has any necessary licence to perform the duties (if relevant); and
- the employee is paid the greater of the base rate of pay that would have been applicable to the employee if the direction was not given; or the base rate of pay applicable to the duties being performed by the employee.
- A direction regarding the location of work (including a direction to work from home), so long as:
- the location is safe (including with regard to the COVID-19 situation);
- the performance of duties from that location is reasonably within the scope of the business operations; and
- the location is suitable for the duties.
Directions must meet base requirements
Jobkeeper enabling directions can be given, subject to following requirements:
- The direction must be reasonable;
- The direction must be because the employer has information that leads the employer to reasonably believe that the direction is necessary to continue the employment of one or more employees;
- The employer must consult with the employee about the direction, before giving the direction and keep a written record of the consultation (to be provided to the employee or their representative);
- The employer must give written notice of the employer’s intention to give the direction at least 3 days before the direction was given or if genuinely agreed with the employee as to a lesser notice period, that lesser period.
Employers under the scheme cannot reduce base hourly rates
If a Jobkeeper enabling direction is given, the employer must ensure that the employee’s base rate of pay (calculated on an hourly basis) is not less than the base rate of pay that would have been applicable to the employee if the direction had not been given.
Employees must comply with directions
If a Jobkeeper enabling direction is given by an eligible employer to an eligible employee then the employee must comply with that direction.
Employers can make other requests
Eligible employers are able to make requests of employees (which must be considered and not unreasonably refused), including requests to:
- make changes to an employee’s days and times of work (but without a change to total hours worked);
- take paid annual leave (so long as after taking the period of leave the employee would not be left with a balance of less than 2 weeks’ annual leave).
Employers and employees can agree on half pay annual leave arrangements
Eligible employers and eligible employees are able to reach agreements in writing regarding the employee taking twice as much paid annual leave at half the employee’s rate of pay for a period. If an agreement is reached, the accrual of leave entitlements during the period of the agreement will continue as if the direction had not been given and the calculation of redundancy payments and payments in lieu of termination will be as if the direction had not been given.
Employees subject to directions can make requests
If a Jobkeeper enabling direction has been given to an employee, the employer must consider and cannot unreasonably refuse an employee’s request to:
- engage in reasonable secondary employment;
- engage in training;
- engage in professional development.
The Fair Work Commission has been given wide powers to deal with disputes regarding the above matters, and will have the power to make orders, on application by an employer or employee, to:
- give effect to a Jobkeeper enabling direction;
- set aside or substitute a Jobkeeper enabling direction;
- make any other order deemed appropriate.
It is clear that the intention of the Government is to make sure that any misuse of the Jobkeeper Scheme is heavily punished, with key provisions being deemed civil penalty provisions. This means that employers who abuse the scheme will face hefty financial penalties. The legislation also provides for expansion to the definition of ‘workplace rights’ within the Fair Work Act so that the general protections provisions can be accessed by employees where they exercise particular rights under the legislation. Employers will need to be very wary of the risks of acting adversely against an employee where an employee refuses to agree to particular requests (where such agreement is necessary).
There is more to come…
Whilst this Alert provides information relevant to the ‘bones’ of the legislation, we expect that there will be much more development of these concepts when the Rules are published. Aitken Legal will be providing a further update once those Rules are finalised and become available to us.
In the meantime, we wish you a safe and restful Easter break.
Disclaimer: The information contained this article is general and intended as a guide only. Professional advice should be sought before applying any of the information to particular circumstances. While every reasonable care has been taken in the preparation of this update, Aitken Legal does not accept liability for any errors it may contain. Liability limited by a scheme approved under professional standards legislation.