JobKeeper – What’s next?

With the end of JobKeeper payments to thousands of Australian businesses and workers, uncertainty about job and income security in the post-covid era has intensified.

On the 28th of March 2021, the largest Australian fiscal package in history came to an end. As an emergency economic response to COVID-19, the JobKeeper wage subsidy saved at least 700,000 jobs according to the Reserve Bank of Australia. At its peak, JobKeeper subsidised the wages of 29% of the workforce, or 3.5 million Australian workers.

Now, the end of the wage subsidy will mean the severing of the link between Australian businesses and employees impacted most by the pandemic. Treasurer Secretary Steven Kennedy stated during a Senate Estimates hearing that up to 150,000 jobs may be lost as a result of the withdrawal of the $90 billion wage subsidy, though this figure is not concrete.

Treasurer Josh Frydenberg has stated that the wage subsidy has “achieved its objectives of supporting businesses and saving jobs”. However, having still not completely emerged from the pandemic, cities such as Brisbane still going into lockdown, and without an official, nation-wide roll-out of the vaccine, many may argue that JobKeeper ended prematurely.

Nevertheless, the JobKeeper wage subsidy was always a temporary emergency response program to the COVID-19 pandemic and the Australian government has ensured that its economic recovery plan will continue to support the economy and the Australian community through the implementation of “tax cuts, business incentives, the JobMaker Hiring Credit and a record investment in skills and training” according to Mr. Frydenberg.

Will unemployment rise?

The end of JobKeeper will likely constitute a “big speed bump” for the economy to manoeuvre. However, economic consultant Nicki Hutley (Ms. Hutley) predicted that it will not “send Australia back into anything near recession”.

Ultimately, it is expected that unemployment will rise in industries struggling to wean off the wage subsidy. Sectors such as aviation, accommodation/food services, and tourism will see most of the job losses, due to the current state of the pandemic on a global level. “The tourism sector of course is the big one, those ones [industries] that are really reliant on international tourists,” Ms. Hutley has said will be hit the hardest following the end of JobKeeper.

While JobKeeper has successfully assisted a large number of Australian workers preserve their employment over the last 12 months, unfortunately for those in industries still heavily affected by COVID-19 restrictions, unemployment is expected to rise.

“Those [industries] are where we’re going to see the jobs lost, and those sectors are going to be in for a hard run for probably the next year”, stated Ms. Hutley.

Advice for Businesses

Businesses will need to become aware of the numerous post-JobKeeper consequences. The end of the JobKeeper scheme means that employers can no longer use the Fair Work Act 2009 (Cth) (the Act) JobKeeper provisions to issue or make JobKeeper enabling directions or agreements, and that an employee’s usual terms and conditions apply again.

An additional issue for employers to consider is that relating to the extension of unpaid pandemic leave. In a recent decision, the Fair Work Commission (FWC) extended unpaid pandemic leave (Schedule X) in some modern awards until 31 December 2021. The FWC found that the variation to extend is necessary to ensure that these awards achieve the modern awards objective, provide a ‘regulatory safety net’ and that employees who need to self-isolate may do so without the risk of losing their jobs.

Finally, other issues for employers to consider post-JobKeeper may include redundancy and stand-down procedures. It is likely that following the end of JobKeeper, employers may need to make employees’ positions redundant due to business down-turn or closure. As such, it is important that notwithstanding the problems to arise post-JobKeeper, employers continue to ensure ‘genuine redundancy’ of employees and remain aware of entitlements and obligations owed in these situations.

Additionally, as the end of JobKeeper is likely to put businesses on the backfoot, forced to potentially stand down employees, it is important for employers to refer to the relevant stand-down provisions of the Act to ensure continued compliance with Australian employment law.

If you have any questions about the COVID-19 Award Flexibility Schedules or other employment issues following the end of JobKeeper, please contact Nick StevensLuke Maroney or Daphne Klianis.

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