Whilst the introduction of the JobKeeper scheme is a welcome relief in these unpredictable times, the flurry of legislation and rules being passed has brought with it several complex entitlements and obligations for you to navigate.
We raise the more pertinent of these below and offer a word of warning when utilising the new enabling directions.
- Notifying employees that they are being nominated
Prior to enrolling for the JobKeeper support payment you must issue an employee nomination notice to eligible employees to:
- Notify employees that you intend to participate in the scheme; and
- Ask employees if they agree to be nominated and receive payments as part of the scheme.
The employee nomination notice can be downloaded and completed here: www.ato.gov.au – employee nomination form
You must seek the eligible employee’s consent for you to receive the JobKeeper payment for that employee.
An eligible employee consents to be nominated by you by completing the employee nomination form, and must not have agreed to be nominated by another employer.
- One in, All in Rule
One of the key features of this scheme is the ‘one in, all in’ rule. But what does this rule mean for employers?
Once you decide to participate in the JobKeeper scheme you must ensure you nominate all your eligible employees. This includes all eligible employees who are undertaking work for you or have been stood down.
In other words, you cannot select which “eligible employees” will participate in the scheme.
- Minimum payment rule
If you participate in the JobKeeper scheme, and an eligible employee, who has agreed to be nominated is due a JobKeeper payment for a fortnight, you must ensure that the total amount payable to that employee in respect of the fortnight is not less than $1,500 or, if the eligible employee is performing work, the amount they would ordinarily be paid for doing that work (whichever is the greater).
- Enabling directions and requests to agree
The Coronavirus Economic Response Package (Payment and Benefits) Act 2020 (Cth) (the Act) was introduced as an amendment to the Fair Work Act 2009 (Cth) to supplement the JobKeeper scheme.
For those employers who are eligible to participate in the scheme, and have nominated eligible employees who have consented to being nominated, the Act allows these employers to:
- direct employees to stand down, reduce their hours or change their duties or location of work (a JobKeeper Enabling Direction); or
- request the employee change their days of work and/or take annual leave.
While the JobKeeper Enabling Directions provide you with the flexibility to make changes to the way your employees work, ultimately to reduce operating costs, you must ensure that you meet the legal requirements in giving a JobKeeper Enabling Direction. If legal requirements are not satisfied, employees will have the right to refuse and civil penalties may apply. Similarly, employees must not unreasonably refuse requests by employers.
- A JobKeeper Enabling Direction
Unless revoked, replaced or withdrawn, a JobKeeper Enabling Direction ceases to have effect at the start of 28 September 2020.
Stand Down Direction
A direction reducing an employee’s ordinary hours of work (including to nil hours) is called a ‘JobKeeper enabling stand down direction’ and is limited to a direction to:
- not work on a day or days that the employee would usually work;
- work for a shorter time than the employee would normally work on one or more days; or
- work fewer hours than the employee’s ordinary hours of work.
An employer may only issue a JobKeeper enabling stand down direction if the employee cannot be usefully employed for their normal days or hours because of the COVID-19 pandemic or government initiatives to slow the transmission of COVID-19.
While a JobKeeper enabling stand down direction applies, you must:
- ensure the employee’s hourly base rate of pay is not less than what would have applied if the direction had not been given;
- allow the employee to take paid or unpaid leave (during which time the stand down direction will not apply);
- consider, and not unreasonably refuse, any request by an employee to engage in secondary employment, receive training or gain professional development;
- ensure the employee continues to accrue annual leave entitlements as though the direction had not been given; and
- ensure such period constitutes services for the purposes of calculating any redundancy pay or payment in lieu notice of termination.
The Act makes clear that a JobKeeper enabling stand down direction will not amount to a redundancy.
A JobKeeper enabling stand down direction can give you wide discretion, which can be utilised to reduce costs and retain employees. By way of an example, provided you meet all legal requirements, you could issue a direction to reduce an eligible employee’s hours to enable a non-eligible employee to remain employed.
Direction as to the duties
You can direct an employee in writing to perform different duties if:
- the duties are within the employee’s skill and competency;
- the employee has any requisite licence or qualification to perform the duties;
- the duties are reasonably within the scope of the employer’s business operations; and
- the duties are safe, having regard to (without limitation) the nature and spread of COVID-19.
While a direction as to duties applies, the employer must ensure the employee’s hourly base rate of pay is not less than what would have applied if the direction had not been given or not less than is applicable to the duties the employee is performing (whichever is greater).
By way of an example, provided it meets all legal requirements, a restaurant employer could issue a direction for a service waiter, who would ordinarily provide services to dine in customers, to carry out meal deliveries (subject to the employee having a drivers licence).
Direction as to the location of the employee’s work
You can direct an employee in writing to perform work from a different location (including the employee’s home) if:
- the place is suitable for the employee’s duties;
- if the place is not the employee’s home, it does not require the employee to travel a distance that is unreasonable in all the circumstances; and
- the performance of the employee’s duties at the place is safe, having regard to (without limitation) the nature and spread of COVID-19, and reasonably within the scope of the employer’s business operations.
Legal requirements for a JobKeeper Enabling Direction
An employee does not have to comply with a JobKeeper Enabling Direction if it is unreasonable in all the circumstances, including where it impacts on an employee’s caring responsibilities.
For a JobKeeper Enabling Direction to be lawful, you must consult with your employees by:
- giving employees at least 3 days’ written notice of an intention to make a direction (or, by agreement, a lesser period of notice); and
- consulting with the employee about the direction and keeping a written record of such consultation.
A JobKeeper Enabling Direction must be necessary to continue the employment of one or more employees.
- A request to agree
Agreement as to different days/times of work
You may request in writing that an employee perform their duties on different days and/or at different times, compared with the employee’s ordinary days/times, provided:
- the performance of the employee’s duties on those days or at those times is safe, having regard to (without limitation) the nature and spread of COVID-19, and reasonably within the scope of the employer’s business operations; and
- the agreement does not have the effect of reducing the employee’s overall number of hours of work.
The employee must consider the request and must not unreasonably refuse it.
By way of example, an employee who usually works weekends could reasonably be requested to work on weekdays in a situation where their employer’s business can no longer trade on weekends as a result of COVID-19.
Agreement as to taking Annual Leave
You may request in writing that an employee agree to take paid annual leave provided it will not result in the employee having a balance of less than 2 weeks annual leave.
The employee must consider the request and must not unreasonably refuse it.
You and employee can also agree in writing to the employee taking twice as much paid annual leave at half their rate of pay.
- Workplace rights
An employee’s refusal to agree to a request to change their days/times of work and/or take annual leave under Part 5b above is specifically protected as a “workplace right” under the Act. This means that it may be unlawful to terminate an employee on the basis that they refused to agree to a request.
The Act also creates the following new but non-exhaustive “workplace rights” which are now expressly protected:
- where an employee benefits from the obligation to pay the JobKeeper payment; and
- where an employee requests secondary employment, training or professional employment while being subject to a JobKeeper enabling stand down direction.
As an employer, you need to be especially aware of not inadvertently taking adverse action against an employee due to the above reasons or other unanticipated entitlements arising from obligations under the legislation. A higher degree of care should be taken in these untested circumstances, given the increased risk of exposure to potentially costly general protections applications at this time.
This update is intended only as a general overview of legal issues currently of interest. It is not intended as legal advice and should be used for information purposes only. Please contact us for specific legal advice.