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Expected changes to JobKeeper Scheme under Fair Work Act

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Expected changes to JobKeeper Scheme under Fair Work Act 2009 (Cth)

28 August 2020 by Nina Hoang

As we expected might happen, the JobKeeper Scheme is likely to be extended past 27 September 2020 and there are some significant changes in store. The Coronavirus Economic Response Package (JobKeeper Payments) Amendment Bill 2020 has passed the House of Representatives. So far Labor has been able to successfully make any amendments to the current bill, but it is possible further changes could be expected before the Bill goes to a final vote before the Senate on Monday, 31 August 2020. See the huge changes to the Fair Work Act 2009 (Cth) (FWA) below.

Legacy Employers

The amendments introduce the idea of a legacy employer; those who qualified for JobKeeper but who no longer are eligible under JobKeeper 2.0. Not to fear though, these employers can still issue directions and make agreements under the JobKeeper Scheme but there are some onerous requirements.

10% Decline in Turnover

  1. To qualify as a legacy employer, your business must pass the 10% decline in turnover test under s 789GCB of the FWA. This means for each quarter ending 31 March 2020, 30 June 2020, 30 September 2020 or 31 December 2020, the business’s turnover must have fallen by 10% compared to the previous quarter to qualify;
  2. Businesses will need to get a 10% decline in turnover certificate from an eligible financial service (auditor, tax agent, BAS agent, accountant or tax adviser) as proof. Small business employers (less than 15 employees) can have their payroll or finance person make a statutory declaration provided they have knowledge of the company’s finances and this will serve as a certificate and
  3. The Federal Court can terminate both JobKeeper Directions and Agreements if the legacy employer fails to satisfy the 10% decline in turnover test.

S 789GJA – Stand down directions (same as current law except for some changes below)

  • Direction cannot require employees to work less than two hours per day;
  • If the employee is not under a class of employees in Fair Work Regulations 2009 (Cth) the reduction in hours cannot be less than 60% of the employee’s ordinary hours as at 1 March 2020;
  • If the employee is under a class of employees in Fair Work Regulations 2009 (Cth) the reduction in hours cannot be less than 60% of the ordinary hours in accordance with that class; and
  • Direction can only take effect on or after 28 September 2020

Note the Fair Work Regulations 2009 (Cth) have not introduced any classes yet.

S 789GJA – Duties of work and S 789GJC

Location of work reflect the current law except the direction must be made on or after 28 September 2020.

S 789GJD – Days of work

Reflect the same as the current law, except any requests must not result in the employee working less than two hours per day and the requests must occur on or after 28 September 2020.

Ss 789GJE and 789GJF

There is an automatic termination of legacy employer’s JobKeeper enabling direction or Agreements if they do not achieve the relevant 10% decline in turnover certificate for the previous quarter.

This automatic termination takes effect at test time which is the start of 28 October 2020, or the start of 28 February 2021 depending on which quarter it is. Legacy employers are also required to provide written notice as to whether the direction will cease or continue beyond the test dates.

S 789GMA – Consultation for legacy employers (more stringent requirements than existing consultation requirements)

  • Reflects existing consultation obligations but now requires 7 days consultation and notice
    • But consultation is not restarted after a representative has been appointed.
    • Consultation requirements must all be met in seven days, but process does not have to take the full seven days.
  • Allows employee representatives more of an active role
  • Employers must provide the following
    • Information about nature of the direction
    • Information about when direction is to take effect
    • Information about the expected effects of the direction on the employee
    • Also must actively invite employee or their representative to provide views
    • Employers are not required to provide confidential information
  • Employers who already consulted under this section, where employee gave views which were considered are not required to consult again
  • Employers must keep written record of consultation

Reasonableness Test

In line with recent case law, the reasonableness test in s 789GK now includes notes explaining a stand down enabled direction will be unreasonable if it has “an unfair effect on some employees in that category when compared with other employees in that category who are also subject to those directions.” So employers are not able to unfairly able to target a few employees, reductions of hours should be spread evenly across a class of employees.

Requests to take annual leave or take leave at half pay

This entire section has been repealed and will not form part of the JobKeeper Scheme past 27 September 2020. Employers will not be able to make any further requests for employees to take annual leave or to make an agreement to take leave at half way after 27 September 2020. Therefore existing requests and agreements cease to have effect once this section is repealed on 28 September 2020.

For example if you have an agreement in place for your employee to take one day of annual leave per week, regardless of when this agreement is due to end, it must automatically end on 28 September 2020. If you force an employee to take leave under this agreement after this date, it is unlawful. In order to have an employee take leave, arrangements must be made in line with any applicable Award or Enterprise Agreement.

Have a question or need advice?

Our team is available to clarify any questions you have and provide the right advice for your business and workforce. Contact Andrew Douglas at andrew.douglas@fcwlawyers.com.au or on 0488 151 503.

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