On 8 April 2020, the Commonwealth Parliament passed amendments to the Fair Work Act 2009 (Cth) (FW Act) to assist employers who qualify for the JobKeeper scheme to deal with the economic impact of the Coronavirus.
The framework for the JobKeeper scheme is contained in the Coronavirus Economic Response Package (Payments and Benefits) Act 2020, which was also passed on 8 April 2020. This Act empowers the making of rules for the operation of the scheme. The rules have now been issued and provide for payments to qualifying employers of $1,500 per fortnight for each eligible employee who is performing work for the employer or who has been stood down. An employer qualifies for the scheme on the basis of a decline in turnover caused by the COVID19 pandemic.
The amendments to the FW Act create a new Part 6-4C titled “Coronavirus economic response”, containing time-limited provisions which will automatically be repealed on 28 September 2020.
A summary of the amendments to the FW Act is set out below.
a) Employer payment obligations
An employer that qualifies for the JobKeeper scheme and is eligible for a JobKeeper payment for a particular employee (a qualifying employer) must:
- Pass on the JobKeeper payment of $1,500 to the employee each fortnight (or apply it towards the employee’s wages in accordance with the scheme rules);
- Ensure that the employee receives the greater of $1,500, and the amount payable to the employee for the performance of work during the fortnight;
- Not reduce the hourly rate of pay for an employee.
These obligations are civil remedy provisions with a maximum penalty of 300 penalty units for a body corporate or, in the case of a serious contravention, 3000 penalty units.
b) Stand down
A qualifying employer can stand down an employee, without needing to meet the general conditions under s. 524 of the FW Act for stand down.
The threshold requirement to make a stand down direction is that the employee cannot be usefully employed for the employee’s normal days or hours because of changes to business attributable to: (i) the COVID‑19 pandemic; or (ii) government initiatives to slow the transmission of COVID‑19. This would permit an employer to stand down an employee due to reduced custom as a result of COVID-19 (which may not be permitted under s. 524).
An employee subject to a stand down direction could ask the employer for permission to engage in:
- reasonable secondary employment;
- training; or
- professional development.
The employer must consider and not unreasonably refuse such requests.
c) Duties, location
A qualifying employer is authorised to give the following directions:
- Duties – direct the employee to perform any duties that are within their skill/competency, provided the duties are safe (having regard to the nature and spread of COVID‑19), the duties are reasonably within the scope of the scope of the employer’s business operations, and the employee is licensed/qualified to perform them.
- Location of work – direct the employee to perform duties at a place that is different from the employee’s normal place of work, including the employee’s home, provided the place is suitable for the employee’s duties, the place is safe (having regard to the nature and spread of COVID‑19), and the duties are reasonably within the scope of the scope of the employer’s business operations. If the place is not the employee’s home, the place must not require the employee to travel a distance that is unreasonable, including having regard to the circumstances surrounding the COVID‑19 pandemic.
d) Taking paid annual leave
An employee must consider and must not unreasonably refuse a request made by a qualifying employer to take paid annual leave, provided the request will not result in the employee having a balance of paid annual leave of less than two weeks.
The employee and qualifying employer can agree that twice as much paid annual leave, at half the employee’s rate of pay, be taken.
e) Rules relating to directions in (b), (c), and (d) above
- Reasonableness – any direction that is unreasonable in all the circumstances does not apply to an employee.
- Continuing the employment of employees – a direction has no effect unless the employer has information to support a reasonable belief the direction is necessary to continue the employment of one or more employees.
- Consultation – the employer must:
o Give the employee at least three days written notice of the intention to give a direction or lesser period by genuine agreement;
o Consult the employee or the employee’s representative about it;
o Keep a written record of the consultation.
- Form of direction – a direction must be in writing.
- Duration – the direction continues in effect until withdrawn or revoked by the employer, or replaced by a new direction given to the employee. This is subject to any FWC order and to cessation of the direction on 28 September 2020 when the amendments are repealed.
- Compliance – an employee given a JobKeeper enabling direction by their employer must comply with the direction.
- Misuse – an employer must not issue a direction that is not justified under Part 6-4C of the FW Act. Contravention can attract a civil penalty of up to 300 penalty units for a body corporate or, in the case of a serious contravention, 3000 penalty units.
During a period when an employee is subject to a direction, the period counts as service.
g) Accrual rules
An employee who is subject to a direction accrues leave entitlements as if the direction had not been given. Any entitlements to redundancy pay and payment in lieu of notice of termination are to be calculated as if the direction had not been given.
The Fair work Commission (FWC) may deal with a dispute about the operation of the amendments by way of mediation or conciliation, or by making a recommendation or expressing an opinion or by binding arbitration.
The COVID-19 situation in Australia is continuously evolving. This update is correct as at 9 April 2020. We encourage you to contact us or visit the FWC website to keep up to speed with the latest developments.
David Cross (Norton Rose Fulbright Employment & Labour Partner) and Shannon Walker (Norton Rose Fulbright Employment & Labour Senior Associate), will be presenting a webinar on the variations to the FW Act resulting from COVID-19 on Wednesday 15 April 2020 at 2.00pm AEST. Please tune in and join David and Shannon for this discussion by clicking here.