Significant Changes to Fair Work Act to Facilitate JobKeeper Scheme

On 8 April, the Morrison Government tabled the Coronavirus Economic Response Package Omnibus (Measures No. 2) Bill 2020 which includes changes to the Fair Work Act to facilitate the JobKeeper scheme. The legislation was subsequently passed by Parliament the same day in a late-night sitting of the Senate.

The changes are significant.  Critically, they will only apply to employers who qualify for the JobKeeper scheme.

JobKeeper enabling stand down direction

The changes will introduce something known as a JobKeeper enabling stand down direction allowing an employer to give a direction to an employee to:

  • Not work on a day or days on which the employee would usually work; or
  • Work for a lesser period than the period 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.

The employer must qualify for the JobKeeper scheme at the time the direction is given and further, the employee cannot be usefully employed for the employee’s normal days or hours during the JobKeeper enabling stand down direction period because of changes to business attributable to:

  • the COVID-19 pandemic; or
  • government initiatives to slow the transmission of COVID-19

The implementation of the JobKeeper enabling stand down direction must be safe, having regard to (without limitation) the nature and spread of COVID-19. 

The employer must ensure that an employee under a JobKeeper enabling stand down direction is paid the greater of:

  • the amount of jobkeeper payment payable to the employer for the employee for the fortnight;
  • the amounts payable to the employee in relation to the performance of work during the fortnight (including loadings, monetary allowances, overtime and penalty rates, leave payments).

Duties and locations

The legislation will authorise an employer to direct an employee to perform duties that are within the employee’s skill and competency, safe for the employee to perform, and reasonably within the scope of the employer’s business operations.  Changes may also be made to work locations, subject to certain constraints.

Requests to take annual leave

The legislation introduces the ability for an employer to give an employee a request to take paid annual leave so long as in complying with the request, the employee’s leave accrual balance would not be reduced to less than 2 weeks.  The employee must consider the request and must not unreasonably refuse it.

Checks and balances

Numerous checks and balances will be introduced to protect employees.  They include a requirement that the JobKeeper enabling stand down direction must not be unreasonable in all of the circumstances.  In addition, a JobKeeper enabling stand down direction about duties of work or location of work is said to have no effect unless the employer has information before them that leads the employer to reasonably believe that the direction is necessary to continue the employment of one or more employees of the employer.

Consultation requirement

Employers seeking to give a JobKeeper enabling stand down direction must consult with an employee by giving written notice of the employer’s intention to give the direction at least 3 days before giving it (unless the employee genuinely agrees to a lesser notice period) and must consult with the employee or a representative of the employee about the direction.  The employer must keep a written record of the consultation.

Accruals and service

The legislation provides that a period during which an employee is subject to a JobKeeper enabling stand down direction counts as service.  Leave accrues during the period as though the direction has not been given and counts for the purposes of determining the entitlement to redundancy pay and notice of termination.

FWC to deal with disputes

The legislation tasks the Fair Work Commission with dealing with disputes, including by arbitrating the dispute.

Treasury resources

Detailed information pertaining to the JobKeeper wage subsidy scheme, including fact sheets for both employers and employees as well as the determined ‘Rules’ and Explanatory Memorandum, is available on the Treasury Department’s website.