On 21 July 2020, the Australian Government announced an extension to the JobKeeper wage subsidy. Eligible businesses may now be able to access the JobKeeper payment for eligible employees until 28 March 2021, provided they can demonstrate a significant decline in turnover as a result of COVID-19.
Given the JobKeeper scheme was due to end at the end of September, it now means that businesses experiencing an ongoing reduction in turnover due to COVID-19 will be able to continue to access the JobKeeper subsidy and rely on the JobKeeper enabling provisions until 28 March 2021.
What does JobKeeper 2.0 mean for eligible employees?
JobKeeper 2.0 will provide a two-tiered payment to eligible employees as follows:
- from 27 September 2020 until 3 January 2021, employers will receive $1,200 per fortnight for those employees who work 20 hours or more per week and $750 per fortnight for those who work less than 20 hours per week. This is a reduction from $1500 for all eligible employees; and
- from 4 January 2021 until 28 March 2021, employers will receive $1,000 per fortnight for those employees who work 20 hours or more per week and $650 per fortnight for those who work less than 20 hours per week.
As an employee, this may affect how much you receive from your employer under the JobKeeper scheme, whether you are continuing to work or have been stood down.
If you are continuing to work, your hourly rate cannot be reduced, although your hours can be reduced under a JobKeeper enabling stand down direction (see below for more details).
What does JobKeeper 2.0 mean for eligible businesses?
As a business owner, the amount you receive as a wage subsidy under the JobKeeper scheme will reduce for all employees from 27 September 2020. Businesses should be mindful that until 3 January 2021:
- for any employees who have been stood down, the JobKeeper amount you pass on to ALL employees will be reduced, depending on their usual hours of work;
- for any employee who ordinarily works 20 hours or more, they need to be paid either $1200 per fortnight, or their usual pay for any hours worked, whichever is the greater; and
- for any part time or casual employees who continue to work, they need to be paid either $750 per fortnight, or their usual pay for any hours worked, whichever is the greater;
These amounts will reduce again from 4 January 2021, so make a note of this date now.
It is important that employers adjust JobKeeper rates for all employees from the relevant dates.
Has employee eligibility changed?
No – the eligibility criteria remains the same as the initial JobKeeper wage subsidy. Employees are eligible for JobKeeper 2.0 if they:
- are currently employed by an eligible employer;
- are a full-time, part-time or fixed-term employee or long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 July 2020;
- are self-employed and meet the turnover test and are not a permanent employee or another employer;
- were aged 18 years or older at 1 July 2020 (or 16 – 17 if independent or not undertaking full time study);
- are an Australian resident;
- are not in receipt of parental leave, Dad and partner pay or Australian worker compensation for total incapacity for work.
- are not receiving the JobKeeper payment from another employer.
What are JobKeeper enabling directions?
Under the current JobKeeper scheme and JobKeeper 2.0, eligible employers can, where reasonable:
- require an employee not to work on a day they would usually work, work for a lesser period on a day, or work a reduced number of hours overall (which can be nil), in circumstances where that employee cannot usefully be employed for their usual hours due to business changes as a result of COVID-19 or any government initiatives to slow it’s transmission;
- direct an employee to perform other duties so long as they are within that employee’s skill and competency and the employee holds the relevant qualifications to perform those duties; and
- direct an employee to work somewhere else than their usual place of work (including from home) provided it is within a reasonable distance and necessary to continue the employment of one or more employees.
Importantly, JobKeeper directions will prevail over any existing employment terms under a contract, award, or enterprise agreement.
Employers must consult with employees which includes giving written notice of their intention to give the direction at least three days before it is given.
Leave (including annual leave and sick leave) continues to accrue according to the employee’s usual hours of work before the direction was given.
In addition to the JobKeeper enabling directions, employers can request (and these requests cannot be unreasonably refused) an employee to:
- work their usual hours but on different days and times; and
- take paid annual leave provided that the employees annual leave balance does not fall below two weeks.
What if a dispute arises?
If a dispute arises between an employer and employer, either party can apply to the Fair Work Commission to have the dispute decided. Common disputes include:
- whether an enabling direction was reasonable or whether it can be attributable to COVID-19 or the government’s response to it;
- if an employer has complied with it’s consultation obligations;
- the suitability of any alternative workplace;
- whether alternative duties are within an employees skills and competence; and
- whether an employee’s refusal of an employer’s request is reasonable.
The Fair Work Commission may deal with the dispute via conciliation or mediation. If this does not resolve the dispute, then the matter may be heard and orders made, which could include setting aside a direction, or substituting a different direction or any other order the Commission considers appropriate taking into account fairness between the parties.
Generally, the Fair Work Commission cannot assist with claims for underpayments of wages and entitlements. If your employer is withholding the JobKeeper payment from you or making any unauthorised deductions, you should contact the Fair Work Ombudsman or a lawyer to advise you about the claim process.
What happens when JobKeeper ends?
The JobKeeper wage subsidy has helped many businesses to keep staff employed. However, the difficult reality is that many employers will not be able to keep paying all of their employees’ wages when JobKeeper ends and may have to let some staff go.
In the event that an employer decides to let staff go, it must comply with the terms or any applicable contract of employment, award or enterprise agreement. This means that employer’s will still need to ensure employees are given the required notice, all annual leave and long service leave accruals are paid out on termination (noting that leave continues to accrue at an employee’s pre-JobKeeper hours/pay), and any consultation requirements are met if an employee is made redundant.
Otherwise, employers will be leaving themselves open to an underpayment or unfair dismissal claim.
If you would like more information on unfair dismissals or redundancies, please visit our website to read articles on both of these topics.
If you need advice or think you may have a dispute or claim, please contact us on (03) 5434 6666 for a no-obligation discussion about your concerns.