JobKeeper provision were introduce in April 2020 in order to financially assist employers negatively affected by the COVID19 pandemic and retain employees. Through the temporary changes to the Fair Work Act, it also provided added flexibility for employers in running their business. The scheme was extended in September 2020 and finished on the 28th of March 2021. Subsequently, JobKeeper payments from the Australian Tax Office (ATO) have now ceased and the temporary provisions to the Fair Work Act have expired. In this article we will explore what obligations after JobKeeper might be and some options going forward.
Eligible Employers
Employers were eligible for the JobKeeper Payment scheme from March 2020 if they met all of the following requirements.
- The employer ran a business in Australia or alternatively the employer was either
- A not-for-profit organisation that operated principally in Australia.
- A deductible gift recipient (DGR) endorsed either as a public fund or for a public fund they operated under
- The Overseas Aid Gift Deductibility Scheme
- For developed country relief
- They employed at least one eligible employee during the JobKeeper fortnight applied for, including stood down or re-hired employees.
- The business could meet the original decline in turnover test.
Eligible businesses did not need to be registered for the GST. However if they were activity statements were required to be submitted for the corresponding quarter in 2019.
JobKeeper enabling directions or agreements could only be made to employees who received JobKeeper payments through the employer.
Qualifying Employers
After the extension of the JobKeeper scheme from the 28th of September these employers qualified to continue receiving JobKeeper payments for their eligible employees. These employers needed to meet the actual decline in turnover test for the relevant period applied for. They were also able to use the JobKeeper provisions contained in the Fair Work Act. This allowed them to make JobKeeper enabling directions without any of the restrictions which applied to legacy employers.
Legacy Employers
From the 28th of September 2020 legacy employers either did not qualify for or chose not to participate in the JobKeeper scheme. This meant they did not receive payments from the ATO but they could conditionally use the temporary provisions in the Fair Work Act. In order to meet the definition of a legacy employer, a 10% decrease in revenue from the relevant quarter of the previous year was required. To prove this, a certificate was required from the employers financial services provider. Alternatively, a statutory declaration was sufficient for small business employers. Legacy employers were able to:
- With changes issue JobKeeper enabling stand down directions.
- Issue JobKeeper enabling directions regarding employee duties and the location of work
- Enter into agreements with employees to work on different days or at different times (with changes).
What Happens Now?
From the 28th of March all employees return to their usual terms and conditions of employment. This means that the normal pay rules apply and employers now need to be paying the correct pay rate for the hours their employees work. The national minimum wage or an applicable award rate, registered agreement or employment contract will contain the relevant rate for the employee.
Importantly, employers should not ask employees to ‘earn back’ their JobKeeper payments by working for free or on a reduced rate of pay. Employees are entitled to return to the employment conditions they enjoyed prior to JobKeeper. Any changes to those prior conditions need to be made by agreement with the employee. These changes are discussed later in this article.
From the 28th of March 2021 employers should not issue new JobKeeper enabling directions or agreements. Employers should be aware that any previous directions issued no longer apply and it is illegal to operate under them.
Options Going Forward
In some situations, employees and employers may find certain changes to working arrangements are beneficial and its in everyone’s interest for them to continue. These changes might be working some or all hours from home, or taking on different duties. Regardless, any changes need to align with the employees relevant award or employment contract.
Leave Entitlements
Any employees who previously were subject to a JobKeeper enabling direction or agreement should not alter their annual or sick leave entitlements.
What if I Can’t Return My Employees to Previous Conditions?
In some situations it may not be possible to return employees to the employment conditions they enjoyed prior to any JobKeeper actions. There are alternative arrangements and options which you can discuss with your affected employees. We will explore some options below.
Change In Duties
In order to keep your business viable it may be necessary to make changes to the kind or work an employee performs. It may be an employee should take on more responsibilities or reduce their responsibilities in proportion with a change in payrate and/or hours. To cover your bases employers should ensure they verify any potential changes to an employees duties against the below:
- The employees’ award.
- The relevant enterprise agreement.
- The employees’ contract.
It is important that employees are able to safely perform any duties assigned to them. This includes ensuring all necessary licenses and qualifications are in place prior to the new work commencing.
Customise and download your Reduction of Hours Notice for free.
Follow the proper processes and notify your employees the right way.
Get startedReducing Hours
A reduction in hours may be necessary due to declining revenue or a shift in employee duties. Reducing a full-time or part-time employee’s normal hours of work should normally be agreed with the employee. Casual workers do not have any fixed hours, however there are minimum requirements. to how often thy work. Any existing annual or sick leave entitlements will then carry over to the new agreement. You can find out what an employees new wages will be after any change in days, times of work rates through the Fair Work P.A.C.T Pay Calculator.
You can use the above form to generate a reduction in hours notice for free.
Redundancy
Unfortunately it may be necessary to make an employee’s position redundant in order for the business to survive. Whether employed full time, part time or casually employees that are subject to redundancy may be owed the following:
- Notice.
- Redundancy pay.
- Payment of accrued entitlements including pay, annual and long service leave.
- Other entitlements.
You can find out more about redundancy pay here.
If you do need to dismiss an employee ensure you take the correct steps in the appropriate way by checking any applicable award, enterprise agreement, employment contract and workplace policy. As the JobKeeper provision of the Fair Work Act no longer applies it is important that employers also bear in mind and follow the unfair dismissal rules. Employees dismissed on any of the following grounds can appeal the decision to the Fair Work Commission:
- A breach of general protections which includes discrimination, belonging to a trade union, taking parental leave and others.
- A reason, or in a way, that is harsh, unjust or unreasonable.
- The dismissal was not consistent with the Small Business Fair Dismissal Code.
- The dismissal was not a case of genuine redundancy.
- Another protected right.
The National Employment Standards also include the rules and obligations associated with ending employment. It is important to comply with these to avoid any legal action and further costs to the business. If you do need to make an employee redundant, you can customise a Letter of Redundancy here.
JobMaker
This is the federal government’s new wage subsidy scheme. It aims to encourage businesses to hire new employees and create new jobs. Through ‘hiring credits’, the scheme businesses can be paid for each new job they create for people 16-35 years old, over a maximum of 12 months. However the rates do vary between two age brackets. You can find out more about how it works and how to apply here.
A Final Note
The employment process can be difficult to navigate at the best of times, let alone during a pandemic. An employment lawyer can accurately explain what your obligations are, the direction that may be beneficial for you and draft any documents you may require. You can find one for your needs through the marketplace.
