On 21 July 2020, the Federal Government announced the JobKeeper scheme, due to end on 27 September 2020, would be extended through to 28 March 2021 (JobKeeper 2.0). The extension was accompanied by a new set of JobKeeper rules involving tiered payments and a range of amendments to the eligibility criteria. Companies looking to claim JobKeeper from 28 September 2020 will have to re-qualify in order to be eligible.
Businesses that qualified and received JobKeeper in phase 1 but no longer qualify for JobKeeper 2.0 may be able to retain some scope to issue revised JobKeeper enabling directions under the Fair Work Act 2009 (Cth) as long as they can demonstrate a 10% decline in turnover. Employers that fall into this category are referred to as ‘Legacy Employers’. For many WA businesses that have been able to resume somewhat ‘normal’ business operations, access to these directions still remains essential during the on-going COVID-19 pandemic.
How to qualify
Businesses must prove the 10% decline in turnover either by:
- Obtaining a 10% decline in turnover certificate from a financial services provider; or
- Self-certify, where the business is a small business employer with less than 15 employees (excluding casuals who are not employed on a regular and systematic basis).
The test must be undertaken for each quarter as follows:
- A 10% decline in turnover for the June quarter to qualify as a Legacy Employer between 28 September 2020 and 27 October 2020;
- A 10% decline in turnover for the September quarter to qualify as a Legacy Employer between 28 October 2020 and 27 February 2021;
- A 10% decline in turnover for the December quarter to qualify as a Legacy Employer between 28 February 2021 and 28 March 2021.
JobKeeper enabling directions for Legacy Employers
Legacy Employers can direct employees to:
- Work reduced hours or days, as long as it is no less than 60% of the employee’s ordinary hours (as at 1 March 2020) and does not require the employee to work less than 2 consecutive hours each day;
- Work at an alternative location; or
- Undertake alternative duties.
The direction can only be issued where the employee cannot be usefully employed for the employee’s normal days or hours because of changes to the business due to COVID-19, or government initiatives relating to COVID-19. Useful work does not have to be the work the employee normally performs. If there is other productive work that the employee can perform safely, the direction cannot be issued.
Additionally, the direction must;
- Be reasonable in all circumstances; and
- Not reduce the hourly base rate of pay.
A Legacy Employer can request employees to work different days/times to what they ordinarily work as at 1 March 2020, but cannot direct them to do so. In other words, the employer and employee must reach an agreement, however, employees cannot unreasonably refuse a request of this kind under the Fair Work Act 2009 (Cth).
Legacy Employers will no longer be able to direct employees to take annual leave under the revised JobKeeper rules.
Existing JobKeeper directions made by employers will automatically cease as at 28 September 2020. Employers will need to issue new directions and ensure they comply with the consultation and notice requirements in accordance with the Fair Work Act 2009 (Cth). This includes:
- Consult with the employee/s at least 7 days before the direction is to be given;
- Provide written notice of the intention to give the direction;
- Provide the employee/s, or their appointed representative, if any, with information about the proposed direction;
- Invite the employee/s or their appointed representative to give their views about the impact of the proposed direction; and
- notify the employee/s in writing before each quarter if the direction is going to continue into the subsequent quarter.
A direction and/or request will cease to operate if the employer does not obtain a certificate for each quarter. An employer who knowingly fails to meet the 10% turnover test but proceeds with a JobKeeper enabling direction may face fines of up to $13,320 for individuals and $66,600 for body corporates.
Want to know more? Contact CCIWA’s Employee Relations Advice Centre team on 9365 7660 or email firstname.lastname@example.org.
The COVID-19 outbreak is rapidly evolving. We are regularly updating our online resource with a range of practical resources and insight to help you navigate the situation. Please visit covid19.cciwa.com for more information.