JobKeeper enabling directions & Agreements for legacy employers
JobKeeper extension
JOBKEEPER ENABLING DIRECTIONS & AGREEMENTS FOR LEGACY EMPLOYERS
Legacy employers are employers that:
- previously participated in the JobKeeper scheme, but no longer qualify, or choose not to participate, from 28 September 2020; and
- demonstrate at least a 10% decline in turnover for a relevant quarter and get either a:
- 10% decline in turnover certificate from an eligible financial service provider, or
- if they’re a small business, a statutory declaration.
Under the extended JobKeeper provisions, from 28 September 2020 legacy employers can issue certain types of directions and make certain agreements with employees that they previously received JobKeeper payments for (eligible employees).
Legacy employers can:
- issue JobKeeper enabling stand down directions (with some changes) – for example, a direction to work less hours;
- issue JobKeeper enabling directions for an employee to change their duties or work location; and
- make agreements with employees to work on different days or at different times.
Legacy employers need to comply with notice and consultation rules and other safeguards under the extended JobKeeper provisions.
The new directions or agreements can only start on or after 28 September. Notice and consultation can start before 28 September 2020.
Any existing JobKeeper enabling directions and agreements that legacy employers already have in place end on 27 September 2020. If legacy employers want to use JobKeeper enabling directions or agreements after this date, they need to reissue or make new directions and agreements with their employees. The new directions or agreements need to start on or after 28 September 2020.
JobKeeper enabling stand down directions
Legacy employers can stand down employees who they previously received JobKeeper payments for in certain circumstances.
A legacy employer can use a JobKeeper enabling stand down direction to direct an employee, that they previously received JobKeeper payments for, to temporarily:
- not work on 1 or more days that they usually work;
- work for a shorter period than the employee usually works on a particular day or days; or
- work less hours overall than the employee usually works.
This means a legacy employer can temporarily reduce an employee’s days or hours of work. However, JobKeeper enabling stand down directions made on or after 28 September 2020 can’t:
- result in an employee working less than 2 hours on a work day; or
- reduce a full-time or part-time employee’s hours of work to less than 60% of their ordinary hours as at 1 March 2020 (their ordinary hours before the impact of coronavirus).
A legacy employer can give an employee, that they previously received JobKeeper payments for, a JobKeeper enabling stand down direction, as long as they meet the following conditions:
- The employee can’t be usefully employed for their normal days or hours because of business changes attributable to:
- the coronavirus pandemic, or
- government initiatives to slow coronavirus transmission (such as an enforceable government direction).
- The legacy employer gives at least 7 days written notice to an employee and consults with them (or their representative) before issuing a JobKeeper enabling stand down direction in writing.
- The legacy employer makes sure the direction is reasonable, taking into account all of the circumstances. This includes:
- any caring responsibilities that the employee has; and
- if the direction applies to a category of employees, making sure it doesn’t have an unfair effect on some employees in that category compared to others.
If a direction is unreasonable, it doesn’t apply to the employee.
Legacy employers have to implement the direction safely. This includes considering the nature and spread of coronavirus.
A legacy employer can’t use a JobKeeper enabling stand down direction to increase the number of hours an employee works.
If a JobKeeper enabling stand down direction applies to an employee, the employee has to comply with it.
The direction doesn’t apply:
- when an employee is taking authorised paid or unpaid leave (such as annual leave or long service leave); or
- during any time the Fair Work Act says the employee is entitled to be absent from work (as opposed to taking leave), for example on a public holiday.
Legacy employers need to:
- Notify the employee in writing at least 7 days before giving the JobKeeper enabling stand down direction (unless the employee genuinely agrees to a shorter timeframe);
- Follow the consultation rules for the direction; and
- Give the employee the direction in writing.
Directions to change duties or work location
Legacy employers can also issue JobKeeper enabling directions to change work location or duties of employees who they previously received JobKeeper payments for, in certain circumstances. Legacy employers need to give at least 7 days written notice to an employee and consult with them (or their representative) before issuing a direction to change duties or work location in writing.
These types of direction can only take effect on or after 28 September 2020, but notice and consultation can start before then.
To make a direction, the legacy employer needs to ensure that:
For change in usual duties:
- the duties are within the employee’s skill and competency;
- the duties are safe (including considering the nature and spread of coronavirus);
- the employee has any required licences or qualifications to perform the duties; and
- the duties are reasonably within the scope of the employer’s business operations.
For change in work location:
- the new location is suitable for the employee’s duties;
- the employee isn’t required to travel an unreasonable distance in all the circumstances (including considering the nature and spread of coronavirus);
- it’s safe for the employee to perform their duties at the new location (including considering the nature and spread of coronavirus); and
- the employee performing their duties at the new location is reasonably within the scope of the employer’s business operations.
The direction won’t apply to the employee unless the legacy employer reasonably believes that the direction about duties is necessary to continue the employment of 1 or more employees. To determine whether it’s necessary, it doesn’t matter that the employer could have given a similar direction to another employee.
A legacy employer needs to make sure that the direction is reasonable, taking into account all of the circumstances, including:
- any caring responsibilities that the employee has; and
- if the direction applies to a category of employees, making sure it doesn’t have an unfair effect on some employees in that category compared to others.
If a direction is unreasonable, it doesn’t apply to an employee.
An employee’s base pay rate can’t be reduced while a direction to change usual duties is in place. If the temporary new duties attract a higher base pay rate, the employee needs to be paid the higher pay rate. For example, under any applicable award or agreement.
If a JobKeeper enabling direction applies to an employee, the employee has to comply with it.
Legacy employers need to:
- Notify the employee in writing at least 7 days before giving the JobKeeper enabling direction (unless the employee genuinely agrees to a shorter timeframe);
- Follow the consultation rules for the direction; and
- Give the employee the direction in writing.
Agreements to change days or times of work
Legacy employers and their employees who previously received JobKeeper payments can agree to change the employees’ usual days or times of work. This type of agreement can’t result in the employee working less than 2 hours on a work day.
These agreements can’t start before 28 September 2020, but can be made before then.
These JobKeeper provisions enable a legacy employer to agree with an employee that they previously received JobKeeper payments for to perform their duties on different days or during different times. Before making an agreement, a legacy employer needs to make sure that:
- it is safe (including considering the nature and spread of coronavirus);
- it is reasonably within scope of the employer’s business operations; and
- the employee’s usual work hours aren't reduced overall (as this requires a JobKeeper enabling stand down direction).
If a legacy employer asks their employee to make an agreement to these changes, the employee has to consider the request and can't unreasonably refuse it. This means that the employee can't refuse the request just because it results in them working extra hours.
Any agreement has to be recorded in writing, such as in a letter or email.
When the agreement ends, employees' terms and conditions will revert back to what they were without the agreement in place.
Directions and Agreements ending
Legacy employees need to meet the 10% decline in turnover test and have a certificate or statutory declaration (for a small business employer) for the relevant quarter, for each quarter they want to use the extended JobKeeper provisions. If they don’t meet the requirements for the next quarter, any JobKeeper enabling directions and agreements given or made under the extended JobKeeper provisions end on:
- 28 October 2020, if the above conditions aren’t met for the September 2020 quarter
- 28 February 2021, if the above conditions aren’t met for the December 2020 quarter.
Legacy employers need to notify their employees in writing about whether the new directions or agreements will continue applying, by the dates listed above.
JOBKEEPER EXTENSION
The JobKeeper scheme has been extended from 28 September 2020 until 28 March 2021. In addition, from 3 August 2020, the relevant date of employment will move from 1 March to 1 July 2020, increasing employee eligibility for the original scheme and the extension.
There are two separate extension periods. For each extension period, an additional actual decline in turnover test applies and the rate of JobKeeper payment is different.
The extension periods are:
- Extension 1: from 28 September 2020 to 3 January 2021
- Extension 2: from 4 January 2021 to 28 March 2021
The rates of payment will change
The rate of the JobKeeper payment in each extension period will depend on the number of hours an eligible employee works. The payment will be split into two rates:
- Tier 1: this rate applies to eligible employees who worked for 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020
- Tier 2: this rate applies to any other eligible employees
The rates of the JobKeeper payment in Extension 1 are:
- Tier 1: $1,200 per fortnight (before tax)
- Tier 2: $750 per fortnight (before tax)
The rates of the JobKeeper payment in Extension 2 are:
- Tier 1: $1,000 per fortnight (before tax)
- Tier 2: $650 per fortnight (before tax)
From 28 September 2020, businesses seeking to claim the JobKeeper Payment will be required to demonstrate that they have suffered a decline in turnover using actual GST turnover (rather than projected GST turnover).
From 28 September 2020, businesses will be required to reassess their eligibility with reference to their actual GST turnover in the September quarter 2020 to be eligible for the JobKeeper Payment from 28 September 2020 to 3 January 2021.
From 4 January 2021, businesses will need to further reassess their turnover to be eligible for the JobKeeper Payment. They will need to demonstrate that they have met the relevant decline in turnover test with reference to their actual GST turnover in the December quarter 2020 to be eligible for the JobKeeper Payment from 4 January 2021 to 28 March 2021.
To be eligible for JobKeeper Payments under the extension, businesses will still need to demonstrate that they have experienced a decline in turnover of:
- 50 per cent for those with an aggregated turnover of more than $1 billion;
- 30 per cent for those with an aggregated turnover of $1 billion or less; or
- 15 per cent for Australian Charities and Not for profits Commission-registered charities (excluding schools and universities).
If a business or not-for-profit does not meet the turnover test for the extension period, this does not affect their eligibility prior to 28 September 2020.
For further information on the changes to JobKeeper, please click here.