Due to the ongoing impact of COVID-19, the Australian government extended the JobKeeper scheme from September 28, 2020, until March 28, 2021.
The extended JobKeeper scheme is comprised of two extension periods: September 28, 2020, to January 3, 2021, and January 4, 2021, to March 28, 2021.
For each extension period, employers need to satisfy an additional actual decline in turnover test, and the rate of the JobKeeper payment will be reduced and tiered based on hours of work.
Employers can take some comfort in knowing the JobKeeper flexibilities in the Fair Work Act have also been extended.
However, substantive changes were made to the JobKeeper provisions by creating two broad categories of employers who can access different flexibilities after September 28, 2020.
- Qualifying employers. Employers who are eligible for JobKeeper payments after September 28, 2020, because they satisfy the new decline in turnover test will retain full access to all JobKeeper flexibilities (except for the provisions about taking annual leave). Qualifying employers can issue directions and make agreements with employees for whom they are entitled to receive JobKeeper payments.
- Legacy employers. Employers who received one or more JobKeeper payments prior to September 28, 2020, and no longer qualify after that date, but who are still experiencing a 10% decline in turnover (as determined by a financial service provider) have access to modified flexibility measures after September 28, 2020. Legacy employers can issue directions and make agreements with employees for whom they previously receiving JobKeeper payments.
I discuss the changes to the JobKeeper flexibilities for both qualifying and legacy employers below.
Changes to duties and location of work
Both qualifying employers and legacy employers can continue to issue reasonable JobKeeper enabling directions in relation to duties and location of work.
A direction given to a category of employees may be unreasonable if it has an unfair effect on some of those employees compared to others who are also subject to those directions.
Changes to days and hours of work
Both qualifying employers and legacy employers can continue to reach agreements in relation to days and times of work.
However, there is an additional condition for legacy employers, who must ensure that such an agreement does not result in the employee working less than two consecutive hours in a day.
JobKeeper enabling stand-down directions
Qualifying employers can also continue to issue JobKeeper-enabling stand-down directions to reduce employees’ ordinary hours, including to zero, provided the relevant criteria for issuing the direction are met.
Legacy employers can also issue stand-down directions, however, they can only reduce an employee’s ordinary hours under a stand-down direction to a minimum of 60% of their “ordinary hours of work” as assessed on March 1, 2020, provided the relevant criteria for issuing the direction are met.
Also, the direction cannot result in the employee working less than two consecutive hours in a day.
The same limitations apply where a stand-down direction is unreasonable, as with JobKeeper enabling directions about duties and location.
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Notice and consultation
For legacy employers, there is a seven-day notice/consultation period prior to issuing a JobKeeper enabling direction, whereas, for qualifying employers, the existing three-day notice/consultation period continues to apply.
Legacy employers also have expanded consultation requirements.
The flexibilities concerning “requesting” employees take annual leave were not extended and were repealed on September 28, 2020, for both qualifying and legacy employers.
Annual leave is now to be taken in accordance with the applicable industrial instrument that governs annual leave including a modern award, an enterprise agreement, or the Fair Work Act.
What does this mean for employers?
Qualifying employers will continue to receive JobKeeper payments for their eligible employees, and they will continue to have access to the JobKeeper flexibilities until March 28, 2021.
In most cases, any JobKeeper-enabling direction or agreement that is in place on September 27, 2020, will automatically carry over from September 28, 2020, if the employer remains eligible to give that direction or make that agreement in those terms.
Legacy employers can continue to access some of the JobKeeper flexibility measures, albeit in a reduced capacity.
Legacy employers need to give employees that are working under either a JobKeeper-enabling direction or agreement written notice about whether their new direction or agreement will continue or end.
Importantly, despite their JobKeeper entitlement having ceased months ago, some childcare providers may be legacy employers, and therefore able to continue to issue JobKeeper-enabling directions to, or make JobKeeper-enabling agreements with, their employees under the Fair Work Act.
Legacy employers should contact their registered tax agent or BAS agent, or qualified accountant to ascertain whether they have experienced a 10% decline in turnover in order to obtain a certificate.
If any employers want employees to take annual leave, they will now need to rely on other mechanisms, such as those in awards.