How does the JobKeeper Payment and new Fair Work laws help me manage my Employees?

JobKeeper Enabling Directions

Where an employer is entitled to the JobKeeper payment for an employee, there have been changes to the Fair Work Act 2009 (Cth) (“Fair Work Act”), which are designed to provide further flexibility to employers and facilitate their business’ survival during the COVID-19 pandemic. These are the so called “JobKeeper enabling directions”.

Specifically, the changes to the Fair Work Act enable employers (without being in breach of any workplace law) to:

(a) stand down JobKeeper eligible employees even if they would not have been permitted to do so under other laws, workplace instruments or an employment contract;

(b) direct employees to work from home (or another location) and to perform alternative duties, provided the direction is reasonable;

(c) make agreements with employees to change ordinary working days and times from what is set in an applicable workplace instrument or employment contract;

(d) agree with employees to provide access to annual leave at twice the duration and half the pay;

(e) request that employees take annual leave, which must not be unreasonably refused.

As is often the case in the law, the word ‘reasonable’ is given a lot of work to do. There is also the risk that an employer who wrongly determines that their employees are eligible for JobKeeper payment when they are not, will be exposed to breaches of contract or workplace laws if they seek to rely on the JobKeeper amendments erroneously. Employers who claim the JobKeeper payment but are not in fact eligible should also expect the tax man to ask for it back, with interest. So how does it work?

Stand Downs

Stand down directions enable employers to direct employees not to work on a day that they would ordinarily work, to work for a lesser period of time than usual, and/or to work less hours overall (including all the way down to zero hours).

During the time of any stand down the employer must pay, at minimum, the amount of the JobKeeper allowance ($1,500.00 per fortnight) and must continue to pay the employee’s regular hourly rate: If an employee works enough hours that at their ordinary rate they would be paid more than the JobKeeper allowance amount, they must be paid the higher amount.

Creative Hint One: Sam employs ten (10) employees and his employees are eligible for the JobKeeper payment. With his current work flow, he only requires two (2) employees to work their regular hours (with wages at $2,000.00 per fortnight). Therefore, he can stand down eight (8) employees to zero hours per week and pay them $1,500.00 per fortnight (which is fully subsidised by the Government) and pay his remaining two (2) employees their regular wages of $2,000.00 per fortnight (of which, $1,500.00 is subsidised by the Government). Sam will therefore pay only $1,000.00 out of pocket for wages in the fortnight to the two (2) working employees.

Creative Hint Two: Following on from the above scenario, let’s say Sam’s employees’ regular hourly rate is $50.00 per hour. Instead of standing down eight (8) employees to work zero hours per week, Sam can give a stand down direction to all ten (10) employees to work at reduced hours of thirty (30) hours per fortnight. Therefore, Sam must pay each employee 30 x $50.00 per fortnight ($1,500.00 per fortnight). Sam’s employees’ wages are fully subsidised by the Government. Sam pays no wages out of pocket and he receives the benefit of his employees completing 300 hours of work over the fortnight.

During any stand down an employee is entitled to request access to alternative employment or education and training and the employer must not unreasonably refuse. For the purpose of calculating an employee’s length of service, time during stand down is counted and the employee’s leave entitlements will continue to accrue.

The conditions which must exist before a JobKeeper enabling direction to stand down can be given are:

(a) the employer must qualify for JobKeeper;

(b) the employee must not be able to be usefully employed because of changes to the business referable to COVID-19 or Government measures in response to the pandemic;

(c) the effect of the stand down must be safe (especially considering COVID-19); and

(d) the employer must be eligible for JobKeeper payments in respect of the employee at the time of the stand down.

There was widespread opinion prior to the announcement of this measure that “stand down” provisions in the Fair Work Act (pursuant to section 524) would only permit employers heavily impacted by the crisis to stand down employees. The newly introduced amendment makes that point moot by specifically authorizing stand downs in response to COVID-19. There is still a requirement that employees cannot be usefully employed before stand downs are enacted, and employers should seek to utilise employees as best they can using the provisions we are about to discuss, before resorting to stand downs.

Alternative Duties

The conditions which must exist before a JobKeeper enabling direction to perform alternative duties can be given are:

(a) the employer must qualify for the JobKeeper;

(b) the new duties must be:

i. safe (especially with COVID-19 in mind); and

ii. reasonably within the scope of the employer’s business operations;

(c) the employee must have any necessary licence or qualification; and

(d) the employer must be eligible for JobKeeper payments in respect of the employee at the time that the direction applies.

Once an employee is stood down completely and in receipt of the JobKeeper payment, they will only be earning $1,500.00 per fortnight, and their employer, while not bearing the cost of that, is also not getting the benefit of their work. This provision allows employers and employees to work together to find solutions that might benefit them both. For example: Hospitality businesses who have changed to delivery-based in order to continue operating are better placed to do so if they can ask their regular employees to conduct their deliveries.

Directions to Work From Home (or Elsewhere)

The conditions which must exist in order for a JobKeeper enabling direction to work from an alternative place to be given are:

(a) the employer must qualify for the JobKeeper;

(b) the new place must be suitable for the employee’s duties;

(c) a place specified that is not the employee’s home must not require an unreasonable amount of

travel (especially considering COVID-19 and related restrictions);

(d) the performance of the employee’s duties at the new place must be:

i. safe (especially considering COVID-19); and

ii. reasonably within the scope of the employer’s business operations; and

(e) the employer must be eligible for JobKeeper payments in respect of the employee at the time of the direction.

This is an example of law reform which simply authorises a step that many employers and their employees have already taken in light of the pandemic. Its application is likely to be uncontroversial when it comes to directing people to work from home, however, more difficult cases will emerge out of people being directed to work in other places, perhaps because a larger space will allow the business to comply with social distancing measures.

Conclusion

As is always the case, what is reasonable will depend greatly on the particular circumstances that apply. Please remember that businesses should always seek independent and specific legal advice regarding any particular employee and circumstance as the legal position varies widely from employee to employee and is dependent on the applicable facts.

Gavin Parsons and Associates can assist you with any questions you may have regarding employment law and your business or that of your clients. Contact Gavin Parsons and Associates on (02) 9262 4471 today.