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TTIA News

Changes to the Fair Work Act – what an employer can do under new ‘Coronavirus Economic Response’ JobKeeper changes.

On 31 March, in a general circular to TTIA Members, we provided details of the Federal Government’s proposed wage subsidy program for employers, known as the JobKeeper Payment. This is a temporary scheme open to businesses and not-for-profit organisations in which the Government has advised it will provide $1,500 per fortnight per eligible employee for up to six months.

On 8 April 2020, (see TTIA general circular dated 9 April), the JobKeeper legislation, including amendments to the Fair Work Act 2009 (FW Act) were passed by the Federal Parliament. The FW Act amendments introduce a new Part 6-4C Coronavirus economic response operating from the date of assent until 28 September 2020 enabling eligible employers to take certain authorised measures to protect their viability through the COVID-19 pandemic.

Whilst at the date of print these provisions have applied for several months, it is worthwhile that employers registered with the JobKeeper scheme are aware of the options that apply for this 6 month period.

Under the Coronavirus Economic Response provisions, eligible employers will have the ability to:

  1. Issue JobKeeper enabling directions, including to:
  • direct an employee to work reduced days/ hours (‘JobKeeper enabling stand down’)
  • direct an employee to work different duties
  • direct an employee to work from a different location.
  1. Request an employee to agree to changed working days/hours (and an employee must not unreasonably refuse).
  2. Request an employee to agree to taking paid annual leave without reducing balance to less than 2 weeks (and employee must not unreasonably refuse).

Obligations On All Employers Receiving Jobkeeper Payments For An Employee

Employers Receiving JobKeeper Payments for An Employee Must Meet:

1.“Wage condition” – by ensuring the employee receives at least $1,500 in the fortnight (or any other amount specified in the rules, yet to be published)

2.“Minimum payment guarantee” – by ensuring the employee receives all amounts payable for work actually performed (including any applicable loadings, penalties, allowances, etc.), or the fortnightly JobKeeper payment payable to the employer for the employee ($1,500), whichever is the higher.

Jobkeeper Enabling Directions

What makes a ‘JobKeeper enabling direction’ different from other employer directions?

Employer directions are usually subject to the terms of any applicable award/enterprise agreement or the employment contract.

‘JobKeeper enabling directions’ can be issued despite any contrary/contradictory provision in a modern award, enterprise agreement or employment contract. Employees also have a statutory obligation under the FW Act to comply with a JobKeeper enabling direction which applies to them.

A JobKeeper enabling direction will only have effect until 28 September 2020, after which time the relevant modern award/ enterprise agreement/employment contract provisions will prevail.

Overriding Conditions For Issuing A ‘Jobkeeper Enabling Direction’

JobKeeper enabling directions are only authorised under the FW Act if all of the following conditions are met:

  1. The direction is made after the date of assent – Assent has not yet occurred but expect this will be in the coming days
  2. The direction is made by an eligible employer
  3. The direction meets the ‘reasonableness’ test — i.e. the direction will not apply if it is unreasonable in all the circumstances (including taking into account any carer responsibilities of the employee)
  4. Consultation requirements are met – including that the employer has:
  5. Provided written notice of the intention to give a JobKeeper enabling direction at least three days before the direction is given (or a lesser period if the employee genuinely agrees)
  6. Consulted with the employee (or the employee’s representative) – and kept a written record of the consultation
  7. The direction is issued in writing – regulations may be made also requiring that the written direction is made in a prescribed form
  8. The employer meets the ‘wage condition’ and the ‘minimum payment guarantee’ for the employee
  9. Additional criteria for the specific JobKeeper enabling direction are met (see below).

What Jobkeeper Enabling Directions Can Be Issued?

There are three types of JobKeeper enabling directions, outlined below.

  1. Direction to work reduced days/hours (‘JobKeeper enabling stand down’)

During a period of JobKeeper enabled stand down, an employee’s hours can be reduced to nil. An eligible employer can direct that, for a period, an employee is on a “JobKeeper enabling stand down period” and will:

  • Not work on a day or days which the employee would usually work; or
  • Work for a lesser period than the period which the employee would ordinarily work on a particular day or days; or
  • Work a reduced number of hours (compared with the employee’s ordinary hours of work.)
  • An eligible employer may only make this direction if:
  • The employee cannot be usefully employed for their normal days or hours because of changes to business attributable to the COVID-19 pandemic or government initiatives to slow the transmission of COVID-19;
  • Implementation of the direction is safe, including having regard to the nature and spread of COVID-19;
  • The employee’s base rate of pay (calculated on an hourly basis) is not reduced as a result of the direction;
  • The employee receives the minimum payment guarantee.

Are Employers Required To Make Top-Up Payments?

The payment obligations do not require an employer to maintain the employee’s usual weekly/monthly/annual rates of pay where the employee is working reduced days/ hours. The minimum payment guarantee, however, requires that the employee receives at least the amount payable for the work actually performed during the period, or the $1,500 per fortnight wage condition, whichever is higher.

Leave Accrual

Leave continues to accrue during the period as if the direction had not been given.

Employee Requests For Secondary Employment, Training, Etc.

Where a JobKeeper enabling stand down applies, the employee may request to engage in reasonable secondary employment, request training or request professional development. Where an employee makes one of these requests, the employer must consider the request and must not unreasonably refuse it. Failure to comply with this requirement may result in penalties.

  1. Direction To Work Different Duties

An eligible employer can issue a direction for an employee to perform any duties that are within the employee’s skill and competency for a specified period, as long as:

  • The employer has a reasonable belief (based on information before it) that the direction is necessary to continue the employment of one or more employees
  • The duties are safe, having regard to the nature and spread of COVID-19; and
  • The employee has any required licences or qualifications to perform the duties; and
  • The duties are reasonably within the employer’s business operations; and
  • The employee’s base rate of pay (calculated on an hourly basis) is not reduced as a result of the direction;
  • If the work performed by the employee attracts a higher base rate of pay, the employee is entitled to the higher base rate of pay for work performed;
  • The employee receives the Minimum Payment Guarantee.

3.Direction to Work at a Different Location

An eligible employer can issue a direction for an employee to work at a place other than their normal place of work for a specified period, as long as:

  • The employer has a reasonable belief (based on information before it) that the direction is necessary to continue the employment of one or more employees
  • The place is suitable for the employee’s duties
  • It doesn’t require the employee to travel an unreasonable distance
  • Performance of work at the place is safe, having regard to the nature and spread of COVID-19
  • Performance of work at the place is reasonably within the scope of the employer’s business operations.

Requesting An Employee To Agree To Changed Working Days/Hours

An eligible employer can request that an employee agrees, in writing, to duties being performed on different days, or at different times (compared with the employee’s ordinary days or times) for a specified period of time, and the employee must not unreasonably refuse the request, as long as the following conditions are met:

  • The employer requests the employee to do so
  • The employee must consider and not unreasonably refuse the request
  • The employer qualified for the JobKeeper scheme
  • The performance of the duties on those days is generally safe and specifically safe having regard to the nature and spread of COVID-19
  • The performance of the duties on those days is reasonably within the scope of the employer’s business operation
  • The employer becomes entitled to one or more JobKeeper payments for the employee for the period that the days or hours are worked

Where the above criteria are met, the agreed changes to days and hours are authorised under the FW Act and can apply notwithstanding contrary provisions in an award/enterprise agreement or employment contract.

Requesting An Employee Take Paid Annual Leave

An eligible employer can request that an employee agrees to take paid annual leave, and the employee must not unreasonably refuse the request, as long as complying with the request will not result in the employee having a balance of less than two weeks.

Agreements To Take Twice As Much Annual Leave At Half Pay

An eligible employer and employee can agree for the employee to take twice as much annual leave at half the employee’s rate of pay, for a period.

If Members need further information or assistance, please call the TTIA Employers’ Hotline on (02) 9264 0011. If you are not a Member, can I suggest you call and discuss membership options.

Brian Beecroft Chief Executive Officer

August 5, 2020 / by / in ,
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