IR Minister Christian Porter has offered an explanation of changes being proposed to the Fair Work Act to facilitate the Morrison Government’s JobKeeper wage subsidy. In a doorstop on 6 April, the Minister said:
Some people who earn less than $1500 and become the subject of the payment will find that their wage in effect will increase, some of them quite dramatically to $1500. Some businesses who make the threshold of distress may still be able to pay many or all of their employees their usual wage, and will use the $1500 to subsidise that wage. Then for businesses who meet the distress thresholds, but are very distressed, finding their very viability threatened by those extraordinary conditions we find ourselves in, they may face a situation where they can only afford to pay some of their employees the $1500 rate, which is less than the usual wage.
So the structural problem that the legislation needs to deal with, simply put, is that if a business on the edge of viability can only afford to pay a worker the $1500 dollar JobKeeper amount, unless we change the Fair Work Act, we cannot guarantee that a worker can lawfully work, the right amount of hours for the $1500 payment.
The Minister was asked whether the legislative changes would make it legal for an employer who has a signed contract with an employee to wind down their hours of work such that the employer could tell the worker they were now working four days a week or three days a week. The Minister replied:
In certain limited circumstances where that’s all the business can do to remain viable and save the job of the employee. So there are four million Australians covered by individual arrangements of a great variety of sorts. Some of those are pegged to awards as a base rate that pay more; some of them are quite bespoke and suit the individuals in question. But where a situation exists, of which there will be many, that a business can only pay a group of employees the $1500 – even if they were usually earning more than that, because there is no demand for the business and the business would otherwise fold and the employee gets nothing other than a redundancy or a stand down; has no job, no wage, no ability to pay a mortgage – there has to be a way to make the $1500 base wage through the subsidy lawfully paid. So that way has to apply to individual agreements, it has to apply to awards and it has to apply to the 11,000 enterprise agreements.The only way you can make it a guaranteed, absolute certainty, a lawful process across the board, is to change the Fair Work Act. Now, obviously, you should do that cautiously, advisedly, with safeguards. But it is the only way that you can be absolutely guaranteed that the system will work.
The Government’s proposed amendments to the Fair Work Act are expect to be tabled today, 8 April. You can read the transcript of the Minister’s doorstop here.