JobKeeper 2.0 – What you need to know
As of 28 September 2020, changes to the JobKeeper scheme have extended the scheme until 28 March 2021. These changes include enabling employers that previously qualified for JobKeeper payments, but that no longer qualify because they have not met the threshold of a 30% decline in turnover, to utilise certain JobKeeper provisions in the Fair Work Act 2009 (Cth), provided they continue to experience a decline in turnover of at least 10%. These employers are known as legacy employers.
While there are also some changes more generally to the types of directions that employers who remain eligible for JobKeeper payments can give, this blog article will focus primarily on legacy employers.
Eligibility rules for Legacy Employers
While legacy employers are not entitled to JobKeeper payments because they no longer meet the threshold of a 30% decline in turnover, there are new rules that allow legacy employer to issue an employee with certain JobKeeper enabling directions. These directions are subject to a number of limitations.
To access these measures, legacy employers must have a certificate issued by a registered tax or BAS agent, or a qualified accountant, stating that they have experienced at least a 10% decline in turnover in the designated financial quarter in which a JobKeeper enabling direction is issued.
A legacy employer who is a small business may alternatively make a statutory declaration regarding its decline in turnover and use this statutory declaration in lieu of a certificate.
New Powers for Legacy Employers
Under the changes, legacy employers will have more limited powers regarding JobKeeper enabling stand down directions, than employers that meet the 30% threshold. A JobKeeper enabling stand down direction given by a legacy employer must not require an employee to work less than 60% of their ordinary hours as at 1 March 2020.. Where hours are reduced as a result of a JobKeeper enabling stand down direction, there must be a corresponding reduction in the employee’s pay. Additionally, a stand down direction must not result in an employee working less than 2 hours in a day. A legacy employer can also unilaterally vary an employee’s duties or location of work. Any direction given by a legacy employer must not be unreasonable in all of the circumstances.
A legacy employer can make a request to an employee to vary their days and times of work. The employee must consider and not unreasonably refuse the request. Where a legacy employer requests to vary an employee’s days and times of work, this request must not result in the employee working less than 2 hours in a day.
A legacy employer must give at least 7 days’ written notice of their intention to give a JobKeeper enabling stand down direction, or a direction varying an employee’s duties or location of work. This is a longer period of notice than the 3 days’ written notice that an employer that is eligible for JobKeeper payments must provide when issuing a stand down, or varying an employee’s duties or location of work. Legacy employers have an additional requirement to consult with the applicable employee, or the employee’s representative (if any) during this 7 day period.
When will legacy employer directions cease to have effect?
If a legacy employer no longer satisfies the 10% decline in turnover test on either 28 October 2020 or 28 February 2021, any directions given to, or agreements made with, employees in accordance with the JobKeeper scheme applying to legacy employers will immediately cease to have effect after the applicable date. In this instance a legacy employer must give the employee written notice before the applicable date (28 October 2020 or 28 February 2021) explaining that the direction or agreement will no longer apply.
The Fair Work Commission will continue to deal with any disputes about directions and agreements from employers and employees. The Commission’s benchmark as at the time of this post is to list JobKeeper dispute applications for conference or hearing within 48 hours from the time the application was lodged and endeavour to finalise 90% of cases within 7 days and 100% within 14 days.
Employers that remain eligible for JobKeeper payments
Amendments to the scheme have removed the ability for employers entitled to JobKeeper payments to request that an employee take annual leave for which the employer would receive JobKeeper payments. Additionally, under the amended scheme, these employers are no longer able to reach an agreement with an employee to take twice as much paid annual leave at half the employee’s rate of pay.
We discussed the original JobKeeper provisions in our previous blog. Apart from the amendments outlined above in respect of employers that remain eligible to receive JobKeeper payments, the powers in our previous article remain in place.
Nicola is an Associate at Justitia. To view Nicola’s profile, click here.