The JobKeeper legislation passed through the Federal Parliament yesterday, but is not in force as yet. It is expected to come into operation shortly. These are the top 10 things you need to know about the legislation:
1. The legislation doesn’t contain the detail on JobKeeper eligibility
While we were all hoping that the legislation would contain the detail about eligibility of the JobKeeper Payment of $1,500 per fortnight, per eligible employee, from 30 March 2020, the legislation doesn’t deal with this detail.
Instead the legislation provides that ‘Rules’ will be made by the Treasurer to deal with matters such as :
- which employers are eligible for the payment;
- the employee to which the payments relate;
- the amount payable and the timing of payments; and
- the obligations for recipients of the JobKeeper Payment.
At the time of writing, the Rules had not been published.
2. JobKeeper allows directions to employees
Subject to certain conditions, the legislation amends the Fair Work Act to enable directions to be given to employees in relation to:
- hours of work (including the stand-down option of reducing hours to zero);
- when hours are worked;
- location of work;
- duties undertaken; and
- taking of annual leave.
However, these options are only open to an employer qualifying for JobKeeper Payments. Employers not qualifying for JobKeeper Payments have to comply with existing laws.
3. JobKeeper directions have their limits
The power to give directions is limited by various provisions such as:
- the reduction of hours and stand down is only available where employees cannot be usefully employed for the employee’s normal days or hours because of changes to the business attributable to the COVID‑19 pandemic or government initiatives to slow the transmission of COVID‑19;
- the requirement that the employer reasonably believes the direction is necessary to continue the employment of one or more employees of the employer;
- the direction must be reasonable in all of the circumstances;
- the employee’s rate of pay not being reduced, for the hours which they actually work; and
- requirements regarding consultation, including keeping written records of the consultation process, and notice of the direction.
4. Directions on annual leave
The legislation provides that if the employer asks the employee to take annual leave, the employee cannot unreasonably refuse. However, the employee must be able to keep at least 2 weeks in their annual leave balance. The annual leave can be taken at half pay with agreement.
Again, these options are only open to an employer qualifying for JobKeeper Payments, with the previous rules applying to employers who do not qualify.
5. Fair Work Commission can hear disputes about directions
An employee, employer, union or employer association can take a dispute about a JobKeeper direction to the Fair Work Commission (FWC). In dealing with the dispute, the FWC must take into account fairness between the parties concerned.
6. Doesn’t make good previous employer actions
Some employers have felt they had no choice but to stand down employees without pay in the current situation, even when there is uncertainty about how the pre-existing stand down provisions in the Fair Work Act operate in a pandemic scenario. This legislation not operate retrospectively to cure any legal difficulties with previous stand down directions.
7. Updated Government announcements provide more guidance on JobKeeper eligibility
The Federal Government has continued to update its information and fact sheets on the JobKeeper eligibility, which presumably will be reflected in the Rules when they are made.
Please see: https://treasury.gov.au/media-release/jobkeeper-update
8. Some clarification on the ‘turnover’ test
Government information sheets indicate that employers will be eligible for the subsidy if:
- their business has an annual turnover of less than $1 billion and they estimate their turnover has or will likely fall by 30 per cent or more; or
- their business has an annual turnover of $1 billion or more (or is part of a consolidated group for income tax purposes with turnover of $1 billion or more) and they estimate their turnover has or will likely fall by 50 per cent or more; or
- they are a charity registered with the Australian Charities and Not-For-Profit Commission (ACNC), and they estimate their turnover has or will likely fall by 15 per cent or more.
The Government publications indicate that the relevant fall in turnover required to qualify for the JobKeeper payment is calculated as it is for GST purposes, and as is as reported on Business Activity Statements.
9. Casuals
Government announcements indicate that the JobKeeper payments are confined to full-time employees, part-time employees, or long-term casuals employed for longer than 12 months, as at 1 March 2020. The Opposition holds concerns about the restrictions on casuals, but it remains to be seen whether the requirements regarding casuals will be changed.
10. Employees on parental leave
Government information sheets state that employees receiving Parental Leave Pay from Services Australia under the Government scheme are not eligible for the JobKeeper Payment. However, employees on parental leave from their employer will be eligible, presumably only if the employer is paying them, at a minimum, $1,500 per fortnight before tax.
More information
For more information or advice, please contact a member of our Employment and Workplace Relations team on (03) 8600 8888.
Note: This update is a guide only and is not intended to constitute legal advice.