JobKeeper update: Reduction in rates and new category of legacy employers

The JobKeeper payment scheme has been extended with modified operation from 28 September 2020 to 28 March 2021.

The scheme applies to employers who have previously received payments and continue to qualify as well as those who qualify for the first time. Employees who have been employed as of 1 July 2020 are now eligible to be included. For employers who qualify:

  1. There are now different rates for full-time employees (Tier 1) and part-time/casual employees working less than 20 hours per week (Tier 2), instead of a flat rate.
  2. The rate of payment has reduced from 28 September 2020 and will reduce again from 4 January 2021.
  3. An actual loss in the September 2020 quarter (and subsequently the December quarter) compared to a previous similar period needs to be demonstrated (there are alternative tests available for certain employers).

From 28 September 2020 until 3 January 2021, the taxable fortnightly JobKeeper payment will be $1200 for Tier 1 employees and $750 for Tier 2 employees. From 4 January 2021 until 28 March 2021, the taxable fortnightly JobKeeper payment will be $1000 for Tier 1 employees and $650 for Tier 2 employees.

Changes have also been made to the work flexibilities available under the Fair Work Act. Qualifying employers are still able, subject to scheme requirements, to give JobKeeper directions to eligible employees to:

  1. work fewer days or hours or be stood down completely if they cannot be usefully employed because of the business effects of COVID-19, and
  2. perform any duties within their skill and competency or work at a different place, including their home, subject to a reasonableness requirement.

By agreement, employees can also work ordinary hours on different days and times.

However, any agreements to take annual leave (including at half pay) stopped applying from 28 September. From 28 September 2020, employers and employees need to follow the usual rules for taking and requesting annual leave, including those set by an award or agreement.

A new category of legacy employers has been created with a modified ability to give JobKeeper directions to previously eligible employees (that is, those employees for whom employers received JobKeeper payments before 28 September 2020).

This category covers employers who previously qualified but no longer qualify for full JobKeeper status but can show a 10% decline in turnover for each of the September and December quarters and obtain a certificate from an eligible financial service provider (or provide a statutory declaration for small businesses).

Legacy employers must notify employees that they have obtained a certificate or made a statutory declaration for the relevant quarter.

Any existing JobKeeper directions end as of 27 September 2020 and fresh directions or agreements will need to be made to apply after that date.

Legacy employers can reduce the normal working hours of previously eligible employees by up to 40% compared to their ordinary hours as at 1 March 2020. However, an employee cannot be directed to work less than two hours on a work day and at least seven days’ notice of the direction must be given.

JobKeeper directions can also be given in relation to employees’ duties and locations of work. However, it is a requirement that the employee cannot be usefully employed for their normal days or hours because of business changes attributable to the coronavirus pandemic or government initiatives to slow coronavirus transmission.

JobKeeper directions and agreements are subject to several conditions, including requirements for notice and consultation. Directions have to be implemented safely and must be reasonable, taking into account all of the circumstances including:

  • any caring responsibilities of an employee, and
  • if a direction applies to a category of employees, making sure it doesn’t have an unfair effect on some employees in that category compared to others.

Legacy employers have greater obligations in this regard and civil penalties may apply to breach of notification requirements. Legacy employers cannot use JobKeeper stand down directions to increase the number of hours worked by an employee. As with the standard JobKeeper regime, directions won’t apply when an employee is taking authorised paid or unpaid leave (such as annual leave or long service leave) or on public holidays.

The Fair Work Commission (FWC) retains a broad dispute resolution power to deal with JobKeeper disputes, including the ability to deal with some disputes about whether legacy employers qualify for this status.

Consultation, cooperation and a paper trail for all directions and agreements remain key requirements.

Employers who are no longer qualify for the JobKeeper scheme or legacy status are subject to normal employment laws and requirements.

In other news, the FWC has also extended the existing award-based unpaid pandemic leave provisions until 29 March 2021. This entitles employees to two weeks of unpaid pandemic leave and enables employers and employees to agree to an employee taking twice as much annual leave at half pay. Both the FWC and Federal Government are considering proposals for additional workplace flexibilities and further changes can be expected.

Reference should be made to the Australian Taxation Office and Fair Work Ombudsman websites for further detail of eligibility and conditions or professional advice obtained.

Rob Stevenson is the Principal of Australian Workplace Lawyers and a QLS Senior Counsellor Email rob.stevenson@workplace-lawyers.com.au.

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