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Perspective

When are employees entitled to more than the JobKeeper payment?

Payments rules (e.g. when and how much to pay) under the JobKeeper Scheme can be confusing, especially for small businesses. In a recent case, the question of how the minimum pay guarantee applies (where employees are paid monthly) was also raised, as Nina Hoang explains.

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Under the JobKeeper Scheme all eligible employees must be paid the minimum guarantee in accordance with section 789GDA. Section 789GDA defines the JobKeeper payable (each fortnight) to an employee is the greater of either:

  1. The jobkeeper payment payable to the employer for the employee for the fortnight; or
  2. The amount payable to the employee in relation to the performance of work during the fortnight.

Amounts payable to the employees include:

  • incentive-based payments and bonuses;
  • loadings;
  • monetary allowances;
  • overtime or penalty rates;
  • leave payments.

In the case of Qantas Airways Limited v Flight Attendants’ Association of Australia (The JobKeeper Case), the question arose as to how the minimum pay guarantee applies if the employer pays the employee monthly (two weeks in arrears and two weeks in advance) particularly if the employees are stood down for part of the month and there are owing overtime entitlements.

Justice Flick determined that:

  1. The amount to which an employee is entitled to be paid for that fortnight is different to what was earned that fortnight.
  2. The minimum pay guarantee only requires payment for all monies for work performed in that fortnight.
  3. Any payments for work outside of the fortnight such as contractual or Award entitlements like overtime, allowances etc must be paid on top.

As such, employers are unable to set off their obligation to pay the JobKeeper payment using outstanding entitlements owed to employees from previous fortnights worked.

For example: A full-time employee, earning $20 an hour, is paid monthly with two weeks pay owing in arrears.

  • Fortnight 1: Employee works 80 hours (receives $1520 for ordinary hours and $120 in overtime in arrears)
  • Fortnight 2: Employee is stood down (receives $1200 JobKeeper payment)
  • Fortnight 3: Employee is stood down (receives $1200 JobKeeper payment in arrears)
  • Fortnight 4: Employee is stood down (receives $1200 JobKeeper payment)

Based on this example, in the second fortnight the employee would be entitled to receive a total of $2840 for the first and second fortnights. The overtime payments would be in addition to the overtime payments.

This interpretation means that employees can receive more than the JobKeeper payment even though they have worked less hours in that fortnight. This is yet another example of a loophole that has been revealed in the JobKeeper legislation and is unlikely to have been intended by Parliament.

Lessons for employers:

  1. Note that any contractual and/or Award entitlements paid in arrears must be paid in addition to JobKeeper payments, under the minimum payment guarantee.
  2. Undertake a reconciliation of your previous JobKeeper payments as it may be necessary to back-pay if they were paid incorrectly.

Written by Nina Hoang

Have a question or need advice?

Our team are here to provide the right advice for your business and workforce. If you have a question or require assistance, please contact Andrew Douglas.

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