If you have struggled to process the sheer amount of content from Government releases, media “takes” and social media discussions about Jobkeeper, you are not alone.
The Federal Government has been “drip feeding” the Australian public with information about “wage subsidies” however information has not been satisfactorily detailed. Employment lawyers have not been able to confidently advise on how an employer should approach applying for this subsidy, because our belief is that the “devil should always been in the detail”.
The good news is that last night, the Jobkeeper legislation was finally passed and it now awaits Royal Assent so that it can come into effect.
The bad news is that we are still not entirely sure how the Jobkeeper regime will work given the various and individual circumstances faced by Australian employers.
What we can say is that the various industrial relations measures put in place are technical and complex to say the least, and employers are best to obtain advice from employment lawyers so as to be sure that the right steps can be taken.
Here is what we know, on the basis that “The Coronavirus Economic Response Package (Payment and Benefits) Bill 2020 has passed both Houses of Parliament.
- What does the legislation do?
For now, it simply sets up a framework giving the Treasurer the powers to make Rules about how that scheme will work. Essentially, it is like giving the Treasurer a blank piece of paper, and the authority to write the manner in which the economic response packages will occur (with assistance from the Commissioner of Taxation). These Rules are not yet available, and so again, we are still unable to obtain a full view on the specifics of this package. We are expecting that the Fair Work Act 2009 (Cth) will be amended. - Have they established the Rules for Eligibility?
In short, no. We are still waiting for the JobKeeper eligibility rules, so that we can provide our clients with information on whether they will qualify for accept to that scheme. However, based upon Treasury’s guidance, employers will be eligible for the subsidy if, at the time of applying:- their business has an annual turnover of less than $1 billion and they estimate their turnover has fallen or will likely fall by 30 per cent or more; or
- their business has an annual turnover of $1 billion or more (or is part of a consolidated group for income tax purposes with turnover of $1 billion or more) and they estimate their turnover has fallen or will likely fall by 50 per cent or more; or
- they are a charity registered with the Australian Charities and Not-For-Profit Commission (other than a school or university) and they estimate their turnover has or will likely fall by 15 per cent or more.
- Will self employed persons be eligible?
Treasury has indicated that self-employed individuals will be eligible if they meet the relevant turnover tests outlined above. The same is true for one (but only one) member of a partnership. - Do we know who will be ineligible?
Treasury has also suggested that various types of employer will be ineligible to participate in the scheme. These include government agencies, local councils, businesses subject to the Major Bank Levy, and companies in liquidation.
- What if I am not sure that I meet that supposed 30% drop threshold?
Importantly, if a business does not meet the drop in turnover test at the time the scheme commences, Treasury has suggested that the business can apply to receive the payment at a later time once the turnover test has been met. In this case, the JobKeeper payment is not backdated to the commencement to the scheme. - Do I have to enter the JobKeeper regime if my employee demands that I do so?
No. It should also be emphasised that the scheme is not a compulsory one. Employers are not obliged to seek jobseeker support for their employees, even if they are eligible to do so. It is likely that those requests will come from employees who would be better off receiving their $1500 fortnightly payment than their normal wages. - Why is this information so important?
Various measures being put forward by the Federal and State Governments seem to use the eligibility of the “JobKeeper Regime” as the qualifier. We hope that the Rules are released very soon, as the various other measures cannot be assessed for relevancy for our clients until those Eligibility Rules for JobKeeper are provided. - Do any amendments to the Fair Work Act (or any other law) apply to employers and employees who are not eligible to receive payments under the JobKeeper scheme?
No. The amendments only affect the rights and liabilities of employers and employees who are eligible for JobKeeper payments. - Do employees still accrue leave entitlements and service whilst on JobKeeper?
We are to assume, unless informed otherwise by the Government, that employees will continue to accrue leave entitlements and service. - Will the JobKeeper Rules be conditional?
We imagine so. We are aware that there will be likely three conditions. Firstly, an employer must pass on the fortnightly payment in full to the employee. Secondly, the minimum payment guarantee requires eligible employers to pay the higher of the JobKeeper payment or a greater amount payable for work performed during the fortnight (in full). Thirdly, the hourly rate of pay guarantee is a benefit for employees. Where the employees’ workload is reduced, but the hourly rate of pay and the hours worked still exceeds the JobKeeper payment, the employer is required to still pay the ‘top up’ of wages for what the employee would normally be entitled to under their hourly rate. - What happens if the JobKeeper Rules are not followed?
We currently understand that the Fair Work Commission or other courts named will have the power to significantly fine employers for not following the rules relating to JobKeeper. - What is a “JobKeeper Enabling Stand Down Direction”?
We are expecting that a “JEDD” can be issued to an employee, informing them that they must reduce or eliminate the required hours of work safely because the employee cannot be usefully employed due to COVID-19, including government restrictions due to COVID-19. We are of the understanding that other conditions will apply. If you have already stood employees down prior to the release of the rules, keep an eye out to see whether they plan to back pay JobKeeper and whether there are any conditions requiring met so as to have this subsidy backpaid.
- Are we expecting any more measures in place to allow us to deal with our employees’ leave, use of time, and location of work?
Yes, definitely. We are expecting more information to come regarding;
(a) the ability for employers to direct employees to perform duties other than those in their contract of employment or industrial instrument;
(b) the ability to direct an employee to work at a place different from their usual workplace where reasonable (an example of this would include working from home, or in a different office location than usual);
(c) the ability to request* employees agree to work different days and hours that have been previously agreed;
(d) the ability to request* that employees take annual leave, and in those circumstances, an employee cannot unreasonably refuse, so long as a leave balance of two weeks remains;
(e) the ability for employees, should they agree, to take their annual leave at half pay.* please note that you cannot direct an employee to accept these terms, they must be done through mutual agreement.** please also not that we are yet to fully understand any conditions which may be placed on the above abilities and so it is best that you wait until the full legislation is released. - How can this happen when there are so many awards and agreements under our industrial relations system?
Under the Fair Work Act, the employer will be able to take the above steps without the overarching industrial instruments needing strictly adhered to in some circumstances, and during this pandemic period. - Can I make someone redundant after I have obtained JobKeeper Eligibility for their role?
Yes, however please be aware that redundancy payments and payments in lieu of notice must be calculated as though the JobKeeper direction had not been issued. In other words, you are required to pay their full employee entitlements as if they would ordinary have been paid but for the pandemic and without that assistance from JobKeeper.
We will continue to update you as news comes to hand, however if you wish to seek advice in relation to the above, or any other employment law, please do not hesitate to contact Kathryn Adams, Principal Lawyer on 0452 614 464 or kathryn@hallettlaw.com.au. If you cannot reach Kathryn and the matter is urgent, please do not hesitate to contact Bianca Muller, Paralegal, at bianca@hallettlaw.com.au.
Blog written by Kathryn Adams and Bianca Muller.
Last Updated : 9 April 2020
** PLEASE BE AWARE THAT THE LAW IS MOVING VERY QUICKLY RIGHT NOW, AND SO THIS INFORMATION IS NOT TO BE TREATED AS LEGAL ADVICE NOR FULLY UPDATED AT THE TIME OF READING*
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