This update provides an overview of the key changes introduced by the legislation. If you require specific or further advice about JobKeeper, please reach out to a member of the Maddocks Employment, Remuneration & Benefits team.

New payment amounts

From 28 September 2020, there will be a two-tiered payment rate.

Employees who worked 20 hours or more (in the two fortnightly pay periods prior to 1 March 2020 or 1 July 2020 (for those who qualified on 1 March 2020, whichever is higher)) will be entitled to a payment of $1,200 per fortnight, while employees who worked less than 20 hours will be entitled to a payment of $750 per fortnight.

These amounts will further reduce from 4 January 2021, dropping to $1,000 per fortnight for employees who worked 20 hours or more, and $650 per fortnight for employees who worked less than 20 hours.

New eligibility requirements

Employee eligibility

The legislation broadens the number of employees who will be eligible to receive JobKeeper payments – moving the employee eligibility test date to 1 July 2020. The requirement that casual employees must be employed for more than 12 months (as at 1 July 2020) otherwise remains.

Employer eligibility

The legislation creates two broad categories of employers who can access the flexibilities provided by the JobKeeper scheme after 28 September 2020:

• employers who continue to be eligible for the JobKeeper payment after 28 September 2020 - Qualifying Employers;
• employers who received one or more JobKeeper payments prior to 28 September 2020, but no longer qualify for a payment - Legacy Employers.

Qualifying Employers will now need to demonstrate an actual decline in GST turnover in the preceding quarter, compared with actual turnover from the corresponding quarter in the previous year. So, for an employer to be eligible from 28 September 2020, employers will need to demonstrate a decline in the September quarter of 2020, compared to the September quarter from 2019. Qualifying Employers will need to further assess their eligibility in January 2021 for the period from 4 January to 28 March 2021. The decline in turnover percentages remain.

While the overall scheme is narrowing in scope, it is still intended to capture the many employers that do not qualify for JobKeeper but continue to experience significant financial difficulties as they recover from the impact of COVID-19. These are the Legacy Employers.

Legacy Employers will be able to access modified flexibility measures under the Fair Work Act for employees that received JobKeeper payments before 28 September 2020 if they can satisfy a new 10% decline in turnover test. To satisfy the test, employers must obtain a decline in turnover certificate from an independent financial service provider. Small business owners with less than 15 employees may instead choose to self-certify by making a statutory declaration.

The new regime prohibits Legacy Employers from issuing JobKeeper enabling stand down directions that have the effect of:

• reducing an employee’s hours of work by more than 60% of their ordinary hours as at 1 March 2020, and/or
• requiring an employee to work less than 2 hours per day.

Beyond this, from 28 September 2020, Legacy Employers will be permitted to issue JobKeeper enabling directions to alter their employees’ duties, location or days of work, so long as a minimum of 7 days written notice is provided (unless otherwise agreed). For the purpose of this consultation period, an employee may appoint a representative, such as a union member, to negotiate the terms of the proposed direction.

If, at any stage, a Legacy Employer fails to meet the 10% decline in turnover test, any agreement or JobKeeper enabling direction issued for that period will be in contravention of the Fair Work Act and will cease to have effect. Significant penalties could follow, depending on whether the employer knew that, or was reckless as to whether, it did not satisfy the decline in turnover test.

Clarification of JobKeeper enabling directions under the Fair Work Act

Extended

The JobKeeper provisions in the Fair Work Act have now been extended to 28 March 2021, with some changes.

Existing JobKeeper enabling directions

Employers do not need to issue new JobKeeper enabling directions (including in relation to stand down) if they will continue to be Qualifying Employers after 28 September 2020. Given the turnover test is assessed in relation to the September quarter of 2020 (which ends on 30 September 2020), employers should exercise caution in relying on existing JobKeeper enabling directions if there is any risk they will fall below the thresholds.

For employers who will not be Qualifying Employers, any current JobKeeper enabling stand down directions will be of no effect from 28 September 2020. As we have set out above, Legacy Employers will be able to issue new directions from 28 September 2020 to employees in accordance with the modified flexibility measures (and given that the ‘test time’ is the start of 28 October 2020 or the start of 28 February 2021, it appears there is effectively a ‘grace period’ for employers who consider themselves Legacy Employers but do not meet the 10% decline in turnover test).

Any directions will apply until they are cancelled, withdrawn or replaced (including by a Fair Work Commission order), or otherwise on 28 March 2021.

Reasonability

Under the current Fair Work Act provisions, a direction will not apply if it is unreasonable in all the circumstances, taking into account the impact of a direction on the caring responsibilities of an employee. Beyond this, limited guidance is provided on what will constitute a reasonable direction.

This legislation helpfully confirms that a direction relating to a reduction of hours will be unreasonable if it has an unfair effect on some employees in a particular category.

Annual leave

Flexibility provisions concerning annual leave will not continue under the amended JobKeeper scheme. Currently, employers can request that an employee take annual leave (so long as at least two weeks remain after the leave is taken) or otherwise enter into an agreement whereby the employee agrees to take annual leave at half pay. These provisions will be repealed on 28 September 2020 and from this date, any agreement that was made under these provisions stops applying. To continue these arrangements, employers may need to rely on any Award-based provisions to this effect.

The Employment & Workplace team will continue to monitor updates in relation to the JobKeeper scheme.