Important changes to modern awards and legislation in response to COVID-19 pandemic
Due to the impact of the COVID-19 pandemic to businesses and its employees, the Fair Work Commission (FWC) recently granted a number of temporary variations to some key modern awards to preserve the ongoing viability of businesses and jobs.
Further, the NSW Government recently passed legislation to amend the Long Service Leave Act 1955 (NSW), and on 30 March 2020, the Prime Minister announced a $130 billion wage subsidy scheme.
Employers should ensure that they are familiar with these important changes which we detail below.
Clerks – Private Sector Award 2010
The determination came into effect on 28 March 2020 and will operate until 30 June 2020, with the option to extend upon application to the FWC. The determination can be found here.
In summary, the temporary variations include the following:
- operational flexibility: Where necessary, an employee will perform any duties that are within their skill and competency regardless of their current classification under the Award, provided that the duties are safe and the employee is licensed and qualified to perform them. Higher duties will apply to employees engaged on duties carrying a higher rate than their ordinary classification
- changes to minimum shift length for employees working from home:
- for part-time employees, a minimum of two consecutive hours on any shift is required (previously three consecutive hours)
- for casual employees, a minimum of two hours of work is required (previously three hours).
- ordinary hours of work for employees working from home: Where an employee requests and the employer agrees, the spread of ordinary hours of work for day workers is between 6:00am and 11:00pm, Monday to Friday, and between 7:00am and 12:30pm on Saturday (previously 7:00am to 7:00pm, Monday to Friday, and 7:00am to 12:30pm on Saturday)
- agreed temporary reduction in ordinary hours:
- an employer and their full-time and part-time employees may agree to temporarily reduce ordinary hours of work for a specified period. The reduced hours cannot be fewer than 75 per cent of the ordinary hours or agreed hours applicable to an employee immediately prior to the temporary reduction
- the approval of at least 75 per cent of the full-time and part-time employees in the relevant workplace or section is required
- despite the reduction, all relevant accruals and all entitlements on termination of employment will continue to be based on each employee's weekly ordinary hours of work prior to the commencement of the amendments.
- annual leave:
- employers and employees may agree to take up to twice as much annual leave at a proportionately reduced rate for all or part of any agreed or directed period away from work, including any close down
- if an employee has an excessive leave accrual, the employer may direct an employee to take any annual leave that has accrued, by giving at least one week's notice, or any shorter period of notice that may be agreed. A direction to take annual leave will not result in an employee having less than two weeks of accrued annual leave remaining (previously six weeks).
- close down:
- an employer may require an employee to take annual leave by giving at least one week's notice as part of a close down of its operations (previously four weeks), or part of its operations, or any shorter period of notice that may be agreed
- where an employee who has not accrued sufficient leave to cover part or all of the close down, the employee is to be allowed paid annual leave for the period for which they have accrued sufficient leave and given unpaid leave for the remainder of the close down.
Hospitality Industry (General) Award 2010
The determination came into effect on 24 March 2020 and will operate until 30 June 2020, with the option to extend upon application to the FWC. The determination can be found here.
In summary, the temporary variations include the following:
- classifications and duties: Where necessary, an employee will perform any duties that are within their skill and competency regardless of their current classification under the Award. Higher duties will apply to employees engaged on duties carrying a higher rate than their ordinary classification
- reduction in hours of work: An employer may direct employees to work reduced hours of work. An employee will continue to accrue leave entitlements based on ordinary hours of work prior to the commencement of amendments. If an employee takes leave, the payment will be based on the ordinary hours of work prior to the commencement of amendments. Specifically:
- for full-time employees, an employer may direct them to work an average of between 22.8 and 38 ordinary hours per week (previously 38 hours) and the employee will be paid on a pro-rata basis
- for part-time employees, an employer may direct them to work an average of between 60 per cent and 100 per cent of their guaranteed hours per week, or per week over the roster cycle.
- annual leave: An employer may direct their employee to take annual leave with 24 hours' notice (previously four weeks). An employer and an employee may agree to the employee taking twice as much leave at half the rate of pay for all or part of any period of annual leave.
Long Service Leave Act 1955 (NSW)
The NSW Government has passed legislation making it easier for employees to access their long service leave during the COVID-19 pandemic. The NSW Government announced the operation of these amendments is currently limited to a six month period. However, the amendments permit the Government to extend the legislation to 12 months as required.
The amendments to the Long Service Leave Act 1955 (NSW) include the following:
- an employer may give a worker a period of long service leave that is less than one month if the worker agrees to that lesser period of leave (previously only permitted for a period of at least one month)
- an employer may give a worker less than one month's notice if the worker agrees to that lesser period of notice (previously the notice had to be at least one month).
Wage subsidy scheme
On 30 March 2020, the Prime Minister announced a $130 billion 'Jobkeeper Payment' plan to assist businesses in paying their employees rather than terminating their employment. Employers will be eligible for the subsidy if:
- their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or
- their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month); and
- the business is not subject to the Major Bank Levy.
The subsidy will apply to current full-time, part-time and long-term casual employees (i.e. a casual employed on a regular basis for longer than 12 months as at 1 March 2020) who were employed by the employer at 1 March 2020. Payments will be made from 1 May 2020 and will be backdated to 30 March 2020.
Participating employers will be required to ensure eligible employees will receive, at a minimum, $1,500 per fortnight, before tax. It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.
For further information, the 'Job Keeper Payment – Information for Employers' fact sheet released by the Federal Treasury is available here.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.