On 1 September 2020, the Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020 (the Bill) was passed by both Houses of Parliament, officially extending operation of the JobKeeper wage subsidy scheme for eligible businesses – subject to reductions in payments and other modifications – through to March 2021.
As explored in our earlier article, eligibility rules for businesses wishing to continue to participate in the extended JobKeeper scheme will be tightened whilst the JobKeeper payment will reduce to $1200 per fortnight from 28 September 2020 to 3 January 2021 and to $1100 per fortnight from 4 January 2021 to 28 March 2021. Eligible employees who typically worked, on average, less than 20 hours per week will have their JobKeeper payment reduced to $750 per fortnight from 28 September 2020 to 3 January 2021 and to $650 per fortnight from 4 January 2021 to 28 March 2021.
The Treasury website indicates that “the reference period for employees regarding their hours worked to determine their tier of payment will be the two fortnightly pay periods prior to 1 March 2020 or 1 July 2020. The period with the higher number of hours is to be used for employees who were eligible at 1 March 2020.”
Prior to the Bill being passed, the Greens unsuccessfully sought to have JobKeeper eligibility expanded to include short-term casuals and visa workers, whilst others were critical of the decision to reduce both the JobKeeper and JobSeeker payments. Despite this, the Morrison Government suggested the revised JobKeeper scheme would correct some “adverse incentives” which were created when the original scheme was implemented earlier in the year. Predominantly, criticism has been directed towards the fact that approximately a quarter of eligible employees who have received the flat, $1500 per fortnight payment earnt more under JobKeeper than they did previously, with the average additional earnings for these individuals being in excess of $500 per fortnight.
Fair Work Act ‘flexibilities’ also extended
Importantly, employers who continue to participate in the JobKeeper scheme beyond September will be able to continue to utilise ‘flexibilities’ such as JobKeeper Enabling Directions to reduce hours/days of work of their staff as well as asking employees to perform alternative duties and work from other locations (such as home), where this is reasonable.
Amendments to the Fair Work Act 2009 will also permit employers who necessarily drop-out of the JobKeeper scheme beyond September – referred to as ‘legacy employers’ – to have access to modified JobKeeper Enabling Directions, providing these employers can verify they have experienced at least a 10% decline in turnover.
Legacy employers wishing to issue a JobKeeper Enabling Direction will be obligated to consult with an affected employee and provide at least 7 days notice of the intent to issue the direction (employers who continue to participate in the JobKeeper scheme will remain subject to the existing notice period of just 3 days). Restrictions will also be introduced on how much an employee’s hours can be reduced via a JobKeeper Enabling Stand Down Direction issued by a legacy employer, with a minimum requirement that a permanent employee receive no less than 60% of their ordinary hours prior to 1 March 2020. Employees must also be provided with a minimum of 2 consecutive hours on any day they work.
The current provision permitting an employer participating in the JobKeeper scheme to request that an eligible employee take a period of annual leave whilst in receipt of the JobKeeper payment will be repealed on 28 September 2020, meaning it will no longer be an available tool to legacy employers, or those who continue to participate fully in the JobKeeper scheme.
Additional background on the extended operation of the JobKeeper scheme is available from the Treasury website.