Eligibility of employers to receive Jobkeeper payments for their employees is not determined by the legislation that was passed yesterday. The eligibility criteria for employees and employers is to be determined by separate Rules determined by the Treasurer. We separately provided a summary of these requirements in the following alert.
At this stage only a limited class of employers will be eligible to participate in the scheme. What we know so far is that an employer must be able to establish that it is not subject to a Major Bank Levy and:
- if their business has a turnover of less than $1 billion - that they estimate that their turnover has or will be reduced since 1 March 2020 by more than 30% relative to a comparable period a year ago (of at least a month)
- if their business has a turnover of $1 billion or more - that they estimate that their turnover has or will be reduced since 1 March 2020 by more than 50% relative to a comparable period a year ago (of at least a month).
We expect that the Rules will provide further detail as to how these conditions will be applied. In the meantime, employers should take care before suggesting to employees that they will benefit from the scheme.
The good news for eligible employers who successfully apply for Jobkeeper benefits is that under the legislation they will accrue certain rights as to the management of employees receiving Jobkeeper benefits. We deal briefly with these rights below.
Jobkeeper enabling directions
The legislation sets out three categories of "Jobkeeper enabling directions" which employers may give to employees who are receiving Jobkeeper payments. These are as follows:
- Jobkeeper enabling stand down
- changed duties of work
- changed location of work.
These directions may only be given where they are "reasonable in all the circumstances", and where the eligible employer reasonably believes they are necessary to continue the employment of one or more employees. Further requirements apply to each type of Jobkeeper enabling direction. These are set out below.
There are also further requirements as to the form of the direction, notice and consultation outlined in the legislation. Jobkeeper enabling directions can be given despite any contrary terms in the Fair Work Act, fair work instruments or employment contracts. However, Jobkeeper enabling directions can be subject to the review of the Fair Work Commission if the conditions to these directions are not satisfied, and penalties may be imposed.
1. Jobkeeper enabling stand down
An eligible employer can direct an employee receiving the jobkeeper payments not to work or direct that employee to reduce their days or hours of work if the employee cannot be usefully employed for the employee’s normal days or hours during the relevant stand down period because of changes to business attributable to the COVID-19 pandemic or government initiatives to slow the transmission of COVID-19. An employee can elect to take paid or unpaid leave during all or part of the period where the direction might otherwise apply.
During a Jobkeeper enabling stand down, the affected employees must receive the greater of:
- the Jobkeeper payment ($1,500 per fortnight)
- the amount payable for work over the given fortnight, based on their ordinary rate of pay and the total hours worked
The conditions for stand down under the Jobkeeper scheme are not as onerous as that under section 524 of the Fair Work Act as they do not require an employer to establish that there is a stoppage of work. We dealt with the difficulties in satisfying the latter test in the following alert.
2. Alteration of duties
Eligible employers can direct employees receiving jobkeeper payments to alter their usual duties of work, if the new duties are within the employee's skill and competency and the employee has any appropriate qualifications. The new duties must also be safe and within the scope of the employer's business operations.
3. Changed location of work
Employers are also empowered to direct employees to work from a different location (including their home). To do so, the place of work must be suitable and safe, and not require an unreasonable amount of travel. Performance of duties at that location must also be within the scope of the employer's business operations.
Requests for agreement
The legislation also refers to three situations in which requests by an eligible employer for an agreement cannot be unreasonably refused:
- Annual leave: Employers may request that employees receiving jobkeeper payments take accrued annual leave, as long as the employee will retain two or more weeks of such leave.
- Varied hours: Employers may request that employees receiving jobkeeper payments change their hours of work.
- Secondary employment: Employees who are subject to a jobkeeper enabling stand down may request that they be allowed to seek secondary employment, training or professional development.
Next steps
The remaining details of the Jobkeeper scheme, particularly including eligibility requirements, are expected to be released as the "jobkeeper payment rules" in the near future, and will provide greater certainty about which employees and employers are eligible to participate in the scheme.
This article can also be accessed here.
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Please don't hesitate to reach out to us with any questions you may have.
This alert was prepared with the assistance of Matthew Salgo, Graduate at Law.
