Businesses should make sure they are aware of the recent changes to the Fair Work Act 2009 (Cth) (FW Act) for the JobKeeper Payments, and the new provisions in a number of Modern Awards, as they contain flexibility provisions that will assist in managing your employees and labour costs during the COVID-19 crisis.
We have summarised the key changes, provided some key links below and also answered some of the more commonly asked questions, to assist your business in understanding and best utilising these new provisions.
The JobKeeper Payments are now available to businesses to assist in retaining your employees through the crisis. To find out if your business is eligible and the steps you need to follow, you should contact the ATO. Key links for additional information include:
- Treasury: https://treasury.gov.au/coronavirus/businesses
- ATO: https://www.ato.gov.au/general/JobKeeper-Payment/
In short, your business may be eligible for $1,500 per fortnight per employee until 27 September 2020 to assist in retaining their employment. Not all employers and employees will be eligible, so it will be important to check if your business is entitled to participate, and which of your employees will be eligible for the payments. There are a number of exclusions businesses will need to be across.
Remember that your business will need to have paid the eligible employees before you receive the payments from the ATO and the payments will start to be made by the ATO to eligible Employers from next month.
You will also need to ensure you keep the ATO updated on any changes to employees you are receiving JobKeeper Payments for. Failure to disclose such changes could result in a recovery of any overpayments made to your business, as well as interest and potential penalties if it cannot be shown that it was an honest mistake.
What if my employees earn less than $1,500 per fortnight before tax?
For employees participating in the JobKeeper scheme, you must pay them at least the $1,500 per fortnight (before tax). This will mean that some part-time and long-term casual employees, employees absent on unpaid or employer paid parental leave, or those that have been stood down without pay will receive more than they would ordinarily have earnt.
What if my employees earn more than $1,500 per fortnight before tax?
An employee’s base rate of pay or salary is not changed by the JobKeeper scheme, so if they are normally paid more than $1,500 per fortnight (before tax) under an Employment Agreement or industrial instrument, such as a Modern Award or Enterprise Agreement, they will continue to be paid that amount.
Whilst the temporary provisions in the FW Act will allow some reductions in hours worked, this will only be in limited circumstances, and the base rate of pay of an employee (worked out on an hourly basis) cannot be reduced.
What if my business decides to re-hire employees we have already terminated?
You should obtain legal advice in relation re-hiring any employees terminated since 1 March 2020. Those employees will have been paid out severance payments and the termination will have impacted on their continuity of service for some, but possibly not all entitlements. You should ensure any re-hiring arrangements and terms are clearly set out in writing and the appropriate type of engagement is used, so your business is not exposed to additional costs and entitlements later on.
Can we still terminate employees whilst receiving the JobKeeper Payments?
There does not appear to be any restrictions preventing an Employer from terminating employees whilst in receipt of JobKeeper Payments, for example; due to poor performance, disciplinary reasons or redundancy. Remember that the legal requirements will still apply including relevant provisions of industrial instruments, Employment Agreements and the FW Act if terminating employees and that the risks still remain with regards to potential unfair dismissal or general protections claims.
NEW FAIR WORK ACT 2009 (CTH) PROVISIONS FOR EMPLOYERS IN JOBKKEEPER SCHEME
New, temporary provisions have been placed in the FW Act until 28 September 2020 to provide greater flexibility for those businesses and their employees that qualify and remain qualified for the JobKeeper Payments. Remember that these new provisions will not be available to employers who do not qualify for the JobKeeper Payments and can only be used by those employers and their employees that are eligible for the JobKeeper Payments.
Breaches of these new provisions can result in significant penalties of up to $126,000, so it will be critical for businesses to properly understand and use the new provisions correctly. We recommend you obtain legal advice if your business needs to enact these provisions and to ensure you strictly comply with all of the requirements and limit the risks of dispute, claims and penalties.
What do the new provisions allow Employers to do?
Eligible Employers will now be able to issue what are called ‘JobKeeper Enabling Directions’ to employees in receipt of the JobKeeper Payments in certain circumstances. These will include directions to eligible employees to:
- work reduced hours/days, or not to work if they cannot be usefully employed (JobKeeper Enabling Stand Down Directions);
- perform different duties within their skills or competency;
- perform work at a different times;
- perform work at different locations, including from their homes; and/or
- reach agreement that an employee takes annual leave, including on half pay.
Employers not using these provisions correctly risk being exposed to claims and disputes in the Fair Work Commission, and as they are civil remedy provisions, penalties of up to $126,000 for contraventions can be imposed.
Importantly, these provisions will not prevent Employers from deploying other strategies to manage their workforces, including redundancies, so it is worth seeking advice for your business on all of the options you have available to manage your workforce and labour costs as you navigate through this crisis.
NEW UNPAID PANDEMIC LEAVE
A number of Modern Awards have been temporarily changed to give employees access to 2 weeks Unpaid Pandemic Leave until 30 June 2020.
The full list of Modern Awards that have these new provisions can be accessed here.
Note: Modern Awards in the Building and Construction, Mining and Maritime industries have not been included in these changes at this stage.
When will an Employee be able to take Unpaid Pandemic Leave?
An employee will be able to elect to take up to 2 weeks’ unpaid leave if they are required:
- to self-isolate by the Government or medical authorities or acting on medical advice to self-isolate; or
- are otherwise prevented from working due to measures taken by the Government or medical authorities (for example: an Enforceable Government Direction restricting non-essential businesses).
How will Unpaid Pandemic Leave Accrue?
Unpaid Pandemic Leave will not accrue progressively like other leave. Employees will therefore be able to take the full 2 weeks immediately now that the leave provisions have been introduced. It will not be pro-rated and will be available in full to all full-time, part-time and casual employees.
Do employees have to use their other leave entitlements first?
No. It will not be necessary for employees to exhaust their paid leave entitlements before accessing Unpaid Pandemic Leave.
What does an employee need to do to take Unpaid Pandemic Leave?
The usual notification requirements will still apply. Employees will also need to provide evidence that would satisfy a reasonable person that the leave is being taken for those reasons.
How many times can an employee take Unpaid Pandemic Leave?
Unpaid Pandemic Leave can only be taken by an employee once.
ANNUAL LEAVE ON HALF PAY
A number of Modern Awards have been changed to allow employees to agree with their Employer to take twice as much Annual Leave at half pay. For example: an employee is paid for 1 week of Annual Leave (and Annual Leave Loading if payable) and they will get to take 2 weeks off.
What do Employers need to do?
Employers will need to agree to such leave arrangements with an employee and record this agreement in writing. It must then be retained as an Employee Record.
When can Annual Leave at Half Pay be taken?
Annual Leave at Half Pay will need to start before 30 June 2020, but can finish after that date.
ADDITIONAL PROTECTIONS AND RISKS
Employers will need to be mindful that there will be protections of additional workplace rights under these temporary FW Act provisions, preventing adverse action against employees because they agree or do not agree to the Job Keeper Enabling Directions.
As we flagged above, breaches of these new provisions can result in penalties of up to $126,000 being imposed on businesses, as well as disputes and claims in the Fair Work Commission, so we recommend you obtain legal advice if enacting these provisions or if you need to implement other strategies in your business, including reductions in hours and/or pay, stand downs or redundancies.
NEED MORE ADVICE?
If you need urgent advice or assistance in managing the impact of Coronavirus in your business, please contact Rouse Lawyers directly on (07) 3667 9698 or contact us by email at [email protected]
We have a range of fixed-price legal response packages available for clients. Given the range of options available and the risks if you incorrectly utilise the JobKeeper Payments and new Fair Work Act provisions, our packages include an initial risk management strategy for clients to assist them to identify the options available, and we can then prepare the necessary advice and templates for these to be quickly implemented in your business.
The above information is not a substitute for legal advice and is for information only. Employers should obtain advice that is specific to their circumstances and business operations, and not rely on this publication as legal advice.