This week the Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020 (Cth) (the "Bill") has passed both Houses of Parliament and is now awaiting Royal Assent. The Bill extends the current time limits on payment rules of JobKeeper to 28 March 2021, creates the category of "legacy employers" and introduces a new turnover test.

The existing industrial flexibility measures will remain in force until March 2021 to reflect the extension of JobKeeper to qualifying employers. However, the flexibilities concerning annual leave will be repealed at the start of 28 September 2020, mostly because employers and employees who wanted to utilise that provision have already done so.

Businesses that previously received JobKeeper but no longer qualify for a payment after 28 September 2020 will be known as "legacy employers" and will be subject to a new turnover test. Legacy employers will have continued access to most of the employment flexibilities if they can demonstrate their turnover has declined by 10% or more in relevant quarters this year compared to last year.

The new legislation will allow legacy employers to modify working arrangements in the same way as businesses receiving JobKeeper, except that:

  • an employee's hours cannot he reduced more than 40% of the employee's ordinary hours of work (as at 1 March 2020);
  • they cannot require an employee to work less than two hours on a day they work; and
  • thy must give employees seven days' written notice before a JobKeeper enabling direction ("JED") is issued.

Legacy employers will be required to hold a "10% decline in turnover" certificate, issued by an independent financial services provider, or to self-certify if they are a small business employer with fewer than 15 employees.

The legislation will include penalties up to $13,200 for individuals and $66,000 for body corporates or employers who do not meet the 10% test and knowingly or recklessly try to use the provision, or if they fail to notify employees that a JED is continuing or ceasing.

One of the new provisions states that a JED will not apply to an employee if the direction is unreasonable in all the circumstances. This adds, to the existing provision on the impact of the direction on any caring responsibilities of the employee, an additional note which provides that employers' directions which reduce hours for a category of employees may be unreasonable if they have an unfair effect on some of those employees compared to other employees who are subject to those directions.

Find the new legislation here.

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