JobKeeper changes to the Fair Work Act pass Parliament

9 April 2020

On 8 April 2020, the Coronavirus Economic Response Package Omnibus (Measures No.2) Bill 2020 passed both Houses of Parliament, temporarily inserting Part 6-4C into the Fair Work Act 2009 (Cth) (Act). This Bill is awaiting Royal Assent.

Fortnightly payment

As addressed in our 7 April 2020 Legal Alert, under the JobKeeper Scheme, eligible employers will be entitled to $1,500 per fortnight for six (6) months to be paid to eligible employees.To be considered an eligible employer, an employer (including not-for-profits) must at the time of applying:

  • Have an annual turnover of less than $1 billion which is estimated to have fallen or likely to fall by 30 percent or more (of at least a month);
  • Have an annualised turnover of more than $1 billion which is estimated to have fallen or likely to fall by 50 percent or more (of at least a month);
  • Not be subject to the Major Bank Levy.

To be an eligible employee, the employee must:

  • Be currently employed by an eligible employer (including those stood down or rehired);
  • Be employed at 1 March 2020;
  • Be employed on a full-time, part-time or long-term casual (employed on a regular basis for over 12 months as at 1 March 2020) basis;
  • Be at least 16 years of age;
  • Be an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 or more years or a Special Category (Subclass 444) Visa Holder;
  • Not be in receipt of a JobKeeper Payment from another employer.

Eligible employees must receive at least $1,500 per fortnight (before tax). The payment works as follows:

  • If an employee usually receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to their contract of employment (i.e. the $1,500 goes towards paying the employee’s usual wage).
  • If an employee usually receives less than $1,500 in income per fortnight before tax, the employee must be paid at least the $1,500 per fortnight (before tax).
  • If an employee has been stood down, the employer must pay the employee, at a minimum, $1,500 per fortnight, before tax.
  • If an employee was employed on 1 March 2020, subsequently ceased employment with the employer, and has been re-engaged by the same eligible employer, the employee will receive, at a minimum, $1,500 per fortnight, before tax.

Flexibility Measures

The temporary changes also aim to facilitate increased flexibility for employers during the pandemic. For example, the Act will now authorize eligible employers to issue the following three (3) “JobKeeper enabling directions”:

  • Stand down direction (including altering hours or days of work – including to nil hours);
  • Direction to alter an employee’s duties (provided the direction is within the employee’s skill and competency); and
  • Direction to alter an employee’s location of work (i.e. a direction to work from home).

It is important for employers to note that although an employee’s hours may be reduced under a JobKeeper enabling stand down direction, an employer cannot reduce an employee’s hourly rate of pay.The changes also allow an employer to reach agreement with an employee in respect of:

  • The employee working different days or at different times;
  • The employee taking paid annual leave (provided it does not result in the employee having less than 2 weeks’ entitlement); and
  • The employee taking leave at half pay.

Significant penalties may be imposed for breach of the new provisions. EMA Legal encourages employers to seek specific legal advice to clarify any questions in respect of these changes.

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This Newsletter is made available to our clients and interested parties to provide immediate access to information about important changes and developments relevant to employers. The information contained in this publication should not be relied on as legal advice and should not be treated as a substitute for detailed advice that takes into account particular situations and the particular circumstances of your business.