If your business is eligible for the JobKeeper Payments, make sure you are aware of the temporary provisions in the Fair Work Act 2009 (Cth) that will assist you to further manage the impacts of COVID-19.

Who do the new provisions of the Fair Work Act 2009 (Cth) (FW Act) apply to?

The FW Act has been changed temporarily until 28 September 2020 to provide greater flexibility for those businesses that qualify and remain qualified for the JobKeeper Payments.

These temporary provisions will not apply to Employers that do not qualify for the JobKeeper Payments.

How will these new provisions operate with existing industrial instruments?

The temporary provisions in the FW Act will operate despite any limitations that may be in a designated employment provision – being a provision in the FW Act, an applicable Modern Award or Enterprise Agreement.

JobKeeper Enabling Directions

Employers will now have more flexibility in responding to the impacts of COVID-19 on their businesses, so long as they qualify for the JobKeeper Payments.

These will include issuing directions to employees in certain circumstances to:

  • work reduced hours/days, or not to work if they cannot be usefully employed;

  • to perform different duties within their skills or competency;

  • to perform work at a different times, or at different locations, including from their homes; and/or

  • reach agreement that an employee takes annual leave, including on half pay.

However, these directions must only be issued in accordance with the new provisions of the FW Act. Misuse could expose a business to claims, disputes and penalties of up to $126,000.

JobKeeper Enabling Stand Down Directions

Employers will now be able to issue directions to employees to stand them down and to:

  • not work on a day or days on which the employee would usually work; or

  • to work for a lesser period than the period which the employee would ordinarily work on a particular day or days; or

  • to work a reduced number of hours (compared to the employee’s ordinary hours of work) (which can be reduced to nil),

during a relevant period (the JobKeeper Enabling Stand Down Period).

However, a JobKeeper Enabling Stand Down Direction can only be given if:

  • the employee cannot be usefully employed for their normal days or hours during the JobKeeper Enabling Stand Down Period because of:

  • changes to the business attributable to COVID-19 pandemic; or

  • Government initiatives to slow transmission of COVID-19 (e.g. Enforceable Government Directions),

  • it can be implemented safely, having regard to the nature and spread of COVID-19;

  • the direction is given to the employees in writing; and

  • the Employer becomes entitled to one or more JobKeeper Payments for the employee for the JobKeeper Enabling Stand Down Period.

Remember that Employers standing their employees down on such basis must be able to demonstrate a link between the COVID-19 pandemic or Government initiatives and changes to their business, and demonstrate that those employees cannot otherwise be usefully employed. Employers must carefully consider the options available in relation to other available duties, including at any different locations of work, prior to resorting to such measures and will need to maintain appropriate records/evidence to substantiate such directions if later challenged.

What happens during JobKeeper Enabling Stand Down Directions?

Employers must pay eligible employees not less than the JobKeeper Payment or the amount payable in relation to the work performed for the relevant fortnight (which is inclusive of their base rate of pay, as well as any applicable loadings, allowances and/or penalties).

Employers must also ensure that the employee’s base rate of pay (worked out on an hourly basis) is not less than the base rate of pay (worked out on an hourly basis) that would have been applicable to the employee if the direction had not been issued to the employee.

Employers must continue to satisfy the wage condition, the Minimum Payment Guarantee and the Hourly of Pay Guarantee, but are otherwise not required to make payments to the employee in respect of the JobKeeper Enabling Stand Down Period where an employee is not working at all.

Other JobKeeper Enabling Directions

There will be a range of other JobKeeper Enabling Directions Employers can utilise to manage the impacts of COVID-19 on their business.

Directions to Vary Duties

Eligible Employers may direct, or reach agreement with an employee, to vary their duties, or undertake different duties, if:

  • the duties are safe (having regard to the nature and spread of COVID-19);

  • the duties are within the employee’s skills and competency;

  • the employee is licenced and qualified to perform the duties (if required); and

  • the duties are reasonably within the scope of the Employer’s business operations.

An employee is not required to comply with a direction to change duties if it is unreasonable.

Directions to Vary Location

Eligible Employers may direct, or reach agreement with an employee, to vary the location of work to a place that is different from the employee’s normal workplace if:

  • the new location is suitable for the employee’s duties;

  • if the new location does not require the employee to travel an unreasonable distance (if the new location is not their home residence); and

  • performance of the employee’s duties at the new location is safe, having regard to COVID-19.

A direction to change the location of work will not apply if it is unreasonable.

What requirements need to be met for JobKeeper Enabling Directions?

Eligible Employers must ensure that:

  • the direction is reasonable in all of the circumstances including consideration of an impacted employee’s caring responsibilities, if any;

  • they notify (in writing, in the prescribed form) of their intention to give a Direction at least 3 days before issuing the Direction (unless employees genuinely agree to a shorter timeframe);

  • consult with the impacted employees (or their representatives);

  • keep a written record of the consultation that has occurred with employees and any representatives; and

  • JobKeeper Enabling Stand Down Directions must be issued in writing.

When do these Directions not apply?

These temporary JobKeeper Enabling Stand Down Directions and JobKeeper Enabling Directions do not apply whilst an employee is taking paid or unpaid leave.

What should an employee be paid during such a Direction?

Employees should be paid for the work they are performing, however if they are stood down or not working in accordance with a JobKeeper Enabling Stand Down Direction or JobKeeper Enabling Direction, whilst they are not entitled to their ordinary wages, they will be entitled to the $1,500 per fortnight (before tax) JobKeeper Payments.

However, if an employee ordinarily receives $1,500 or more in income per fortnight (before tax) for their ordinary hours of work performed, they will continue to receive that regular income in accordance with their relevant Employment Contract or industrial instrument.

What happens to employee service related entitlements during such Directions?

If an employee is subject to a JobKeeper Enabling Stand Down Direction they will accrue leave entitlements as if the direction had not been given. Further, redundancy pay and payment in lieu of notice of termination are to be calculated as if the Direction had not been given.

If an employee takes paid annual leave under an agreement subject to these new provisions, any redundancy pay and payment in lieu of notice of termination are calculated as if the agreement had not been made.

Agreement to Vary Days/Times of Work

Eligible Employers may reach agreement with an employee to perform work on different days and/or at different times during a period as compared with the employee’s ordinary days or times of work if:

  • performance of duties on different days or times is safe;

  • it is reasonably within the scope of the Employer’s business operations; and

  • the agreement does not reduce the employee’s number of hours of work compared with the employee’s ordinary hours of work.

Again there must be consultation with the employee (or their representative) and the changes must be safe (having regard to the nature and spread of COVID-19). Such changes should be recorded in writing.

An employee must consider and cannot unreasonably refuse an Employer’s request for agreement to such varied arrangements.

Agreement to Take Annual Leave

Employers may direct an employee to take annual leave, so long as an employee is not left with a balance of less than 2 weeks accrued annual leave. Consultation is still required.

Employees must consider, and must not unreasonably refuse a request by their Employer to take annual leave, including if the request is for them to take annual leave at half pay.

Where annual leave can be taken at half pay, an employee gets twice as much annual leave time off work.

This agreement will need to be in writing.

Employee Requests for Secondary Employment and Training

If a JobKeeper Enabling Direction has been given and an employee requests:

  • reasonable secondary employment;

  • training; or

  • professional development,

the Employer must consider the request and must not unreasonably refuse the request.

What if there is a dispute about these new provisions?

The Fair Work Commission will have jurisdiction to deal with disputes arising under the new JobKeeper provisions by:

  • mediation;

  • conciliation;

  • by making a recommendation or expressing an opinion; or

  • by arbitration.

The Fair Work Commission will be able to make:

  • an order it considers desirable to give effect to a JobKeeper Enabling Direction;

  • an order to setting aside or substituting a JobKeeper Enabling Direction; and/or

  • any other order it consider appropriate.

In dealing with the dispute, the Fair Work Commission must take into account fairness between the parties concerned.

Applications can be made by Employers, as well as employees or their representative organisations.

Protection of Workplace Rights

There will be protections of additional workplace rights under the temporary FW Act provisions, preventing an Employer from taking adverse action against an employee because they agree, or do not agree to:

  • perform duties on different days, or at different times;

  • take paid annual leave as per a request under the new provisions; and/or

  • make a request for secondary employment, training or professional development.

Interaction with Other Laws

These new provisions will operate subject to the general protections, unfair dismissal provisions of the FW Act, as well as anti-discrimination and work health and safety laws.

No Redundancy

The giving of a JobKeeper Enabling Direction does not amount a redundancy of the employee’s employment.

Penalties for Breaches

It will be important to ensure strict compliance with the requirements of the JobKeeper Payments and scheme and new FW Act provisions, as there will be penalties for contraventions that can be imposed on Employers. These civil penalties are not insignificant - up to $126,000 for serious contraventions can be imposed if an Employer knowingly issues or misuses a direction to an employee that is not authorised by these new provisions.

What records do Employers need to keep?

Your business should ensure that it retains any directions issued or agreements reached in writing in accordance with these new provisions, together with evidence to substantiate such directions in the event the business is challenged, as well as the consultation records required under the new provisions.

What do Employers need to do now?

Assess your ability and participation in the JobKeeper Payments scheme and register with the ATO if you have not already.

If registered and participating, Employers need to ensure that they properly consider the options now available and ensure any directions issued or steps taken to respond to the impacts on their business due to COVID-19 are in compliance with these new provisions of the FW Act. If the JobKeeper provisions do not apply, businesses will still need to ensure compliance with the FW Act and relevant industrial instruments.

Remember that there are a range of measures that Employers can put in place to manage the impacts of COVID-19 and given the length of time this goes on, we expect most businesses will need to enact multiple measures over the short to medium term. It will be critical for businesses to ensure they can use the measures available to manage the impacts of COVID-19 within the current Fair Work parameters, and to reduce the risks of claims and disputes and potential penalties.

Should your business require further advice or support in working out what these measures should be and in preparing and planning for business during and after COVID-19, IR Legal Solutions is offering tailored COVID-19 Legal Response and Revival Packages for our clients, which are specifically tailored to your business, and include a customised risk management strategy. Please contact IR Legal Solutions to discuss.

This content is not be a substitute for legal advice and is for information only. Employers should obtain advice that is specific to their circumstances and business operations, and not rely on this publication as legal advice.