While some employers may no longer be eligible to receive JobKeeper payments for their employees after 28 September 2020, they may still be able to give directions under additional amendments to the Fair Work Act 2009 (FWA) aimed at assisting employers to keep their business afloat during the slow recovery back to full capacity.
The government has now passed legislation, referred to as “JobKeeper 2.0”, extending the operation of the flexibilities introduced in April 2020 allowing employers to stand down employees, reduce their hours and change their duties/location of work (see our earlier article).
In addition to a reduction in the amount of JobKeeper wage rates recently announced, introduced on a sliding scale from 28 September 2020 to 28 March 2021 with lower payments for employees working less than 20 hours a week, the extension to the JobKeeper wage subsidy includes new eligibility requirements for employers. While the 30% decline in turnover test still applies, this will need to be demonstrated by an actual decline in turnover for the relevant quarter. This will inevitably result in employers who are currently eligible to receive JobKeeper no longer being eligible under JobKeeper 2.0.
For employers who continue to experience at least a 30% decline in turnover, the JobKeeper-enabled stand down directions will continue to be available in their current form.
For employers currently receiving JobKeeper who will no longer be eligible after 28 September 2020 (referred to as “legacy employers”), these employers will still be able to access the flexibilities introduced into the FWA provided that the business can show a decline of at least 10% in turnover in the relevant quarter this year compared to last year (if there are more than 15 employees this will require a certificate from an “eligible financial services provider” as defined in the amendments to the FWA).
Legacy employers will be able to give JobKeeper enabled directions (including reduction in hours, change in duties or change in location) but only if:
- The employee’s hours are not reduced below 60% of their ordinary hours as at 1 March 2020; and
- The employee must be provided with at least two hours work on any day they are required to work; and
- The employee is provided with seven days’ notice of the direction.
For employers with a decline in turnover of between 10% to 30%, this is a welcome addition to the options available to them to manage their workforce with a view to building up to pre-pandemic capacity.
Lessons for Employers
Employers need to determine whether or not they can continue to access the JobKeeper directions in the FWA in order to assess their options in dealing with the impacts of COVID-19 on their business:
- If you are currently eligible for JobKeeper and you continue to have at least 30% decline in turnover- you will continue to receive JobKeeper payments after 28 September 2020 and for as long as the decline in turnover continues. You will continue to be eligible to access all of the JopKeeper-enabled directions in the FWA.
- If you are currently eligible for JobKeeper but turnover decline is now between 10%-30% - you will not receive JobKeeper payments after 28 September 2020 but can continue to access to FWA flexibility provisions provided that the pre-conditions are met.
- If you are currently eligible for JobKeeper but turnover decline is now below 10%- you will not receive JobKeeper payments after 28 September 2020 and will no longer be able to make JobKeeper- enabled directions. If you need to alter working arrangements with employees, in most cases you will need to consult with employees and seek agreement to those changes.