On 3 September 2020, the Australian Government enacted the Coronavirus Economic Response Package (JobKeeper Payments) Amendment Act 2020 (Cth) (the Act). The purpose of this Act was to extend and amend the JobKeeper provisions in the Fair Work Act 2009 (Cth) (the FW Act).
The Act extends the JobKeeper provisions to 28 March 2021
The extended JobKeeper payment introduces a two-tier payment and extension system for those businesses that continue to meet the JobKeeper decline in turnover test. This is not set out in the Act but will become law when amendments to the JobKeeper Rules are registered.
Critically, the decline in turnover test will now be based on the actual quarterly GST turnover of the previous quarter for each extension period.
It is proposed that the two tiers will be:
- Tier 1:
- eligible employees who worked at least 80 hours in four weeks of pay periods before either 1 March 2020 or 1 July 2020; and
- eligible business participants who were actively engaged in the business for at least 80 hours in February 2020. These eligible business participants must provide a declaration that they worked this amount.
- Tier 2: any other eligible employees or business participants. Meaning those who worked less than 80 hours in four weeks before either 1 March 2020 or 1 July 2020, such as part-time employees.
Both Tiers allow for those employees who did not meet the 1 March 2020 eligibility requirements to have their eligibility for JobKeeper reassessed. An employee can now also be eligible for JobKeeper if by the 1 July 2020 (the 1 July Test) they were employed either as a:
- full-time, part-time or on a fixed-term basis; or
- were a casual employee employed on a regular and systematic basis for at least 12 months.
For example, if a business hired a new full-time employee after 1 March 2020, that employee would now be eligible under the 1 July Test. Another example is if a casual employee who was employed on a regular and systematic basis did not have 12 months service by 1 March 2020, but did by 1 July 2020, they would also now be eligible for JobKeeper.
JobKeeper Extension 1 will run from 28 September 2020 to 3 January 2021. For those businesses that meet the JobKeeper decline in turnover test for the September 2020 quarter (being July, August and September), the JobKeeper payment will be decreased to:
- Tier 1 – $1,200 per fortnight before tax; and
- Tier 2 – $750 per fortnight before tax.
JobKeeper Extension 2 will run from 4 January 2021 to 28 March 2021. For those employers or businesses that meet the JobKeeper decline in turnover test for the December 2020 quarter (being October, November, December), the JobKeeper payment will be decreased to:
- Tier 1 – $1,000 per fortnight before tax; and
- Tier 2 – $650 per fortnight before tax.
For employers who continue to be eligible for the JobKeeper payments, there are no changes to the JobKeeper Direction provision as outlined in our previous JobKeeper Newsletter.
For those businesses that no longer meet the JobKeeper decline in turnover test, the Act makes amendments to the FW Act that enable certain businesses, known as legacy employers, to continue to give JobKeeper directions, in a modified form.
To be eligible for the modified JobKeeper directions, a business must meet the following requirements:
- The 10% decline in turnover test – meaning that a business' actual GST turnover for the designated quarter declined by 10% compared to the same quarter in 2019.
- Designated Quarter – the designated quarters are:
- before the 28 October 2020 – the June 2020 quarter;
- between 28 October 2020 and 27 February 2021 – the September 2020 quarter; and
- after 28 February 2021 – the December 2020 quarter.
- The 10% decline in turnover certificate – a business, other than a small business employer, is to provide a 10% decline in turnover certificate prepared by an eligible financial service provider.
- An eligible financial service provider is a registered tax agent or BAS agent or a qualified accountant. However, it cannot be a director or employee of the business, an associated entity of the business or the director or employee of an associated entity of the business.
- For small business employers, those who employ less than 15
employees, an authorised person who has knowledge of the financial
affairs of the business is to make a statutory declaration that the
business meets the 10% decline in turnover test for the designated
- Was eligible for JobKeeper payments before 28 September 2020 but is no longer eligible for the JobKeeper payments
If a business meets the above requirements, they can make the following modified JobKeeper directions:
- JobKeeper Enabling Stand Down – if because of the COVID-19 pandemic or government initiatives to slow the transmission of COVID-19 an employee cannot be usefully employed during their ordinary hours, a business can direct an employee to:
- not work on a day/s they usually work;
- to work less than the employee normally works; or
- work reduced hours.
However, these businesses are no longer able to direct their employees to stand down to zero hours. The modified JobKeeper enabling stand down direction only allows businesses to stand down employees to 60% of their ordinary hours as at the 1 March 2020. Employees cannot be directed to work less than two hours per day.
A business cannot give a modified JobKeeper enabling stand down direction if an employee is taking authorised paid or unpaid leave.
- JobKeeper Duties of Work Direction – a business can direct an employee to undertake any duties that are within the employee's skill and competency and are reasonable within the scope of the business. The direction must be safe having regard to the nature and spread of COVID-19.
- JobKeeper Location of Work Direction – a business can direct an employee to work at a place that is different from their normal place of work that is suitable for the duties being performed. This includes the employee's home. However, the direction must not require the employee to travel an unreasonable distance. The direction must also be safe having regard to the nature and spread of COVID-19 and be within the scope of the business.
- JobKeeper Days of Work etc. Direction – a business can request an employee to enter into an agreement to work on different days or times as long as there is no reduction in the number of hours and the employee will not work less than two hours a day. The employee must consider this request and not unreasonably refuse the request.
If a business no longer meets the 10% decline in turnover test, the modified JobKeeper directions or agreements cease with immediate effect.
Before giving the modified JobKeeper directions, a business is still required to meet strict consultation requirements. The Act modifies the JobKeeper consultation requirements. Under the JobKeeper provisions, a business is only required to provide three days' notice before giving a JobKeeper direction and consult in this period. The Act modifies the notice period to seven days before a business can give a modified JobKeeper direction, unless the employees agree to a lesser period.
During this seven-day notice period, the business is to consult with the employee or the employee's representative. The business is to provide the employee, or their representative, with information about the modified JobKeeper direction. This information may include the nature of the direction, when the direction is to take effect and the expected effects on the employee. The business is to invite employees, or their representative, to give their views on the impact of the direction, which the business must give 'prompt and genuine consideration' to.
For those businesses that continue to be eligible (under the new eligibility rules) for the JobKeeper payments, the only change is the amount of the JobKeeper payments. There are no changes to the JobKeeper directions.
For those businesses that are no longer eligible for the JobKeeper payments, but are experiencing at least a 10% decrease in GST turnover, they can continue to make JobKeeper directions and agreements in the modified terms. The main changes are that a business can no longer stand down an employee to zero hours and must give at least seven days' notice before giving the modified JobKeeper direction.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.