Summary

Following recent changes made to the Fair Work Act 2009, employers who qualify for the JobKeeper Scheme can give a “JobKeeper Enabling Direction” to employees in receipt of the JobKeeper payment forcing them to:

  1. Reduce their hours of work (including reducing their hours to nil, i.e. “standing them down”) (either direction is referred to as a “JobKeeper Stand Down Enabling Direction”),
  2. Alter the duties to be performed by the employee; and/or
  3. Change the location from which the employee performs their work.

 

Although the legislation states that regulations may set out that a particular form must be used to give such a direction, no such form has been prescribed (at the time of writing). It, therefore, appears that these directions can be implemented by giving suitable letters to employees.

Employers who qualify for the JobKeeper scheme can also make a request for employees in receipt of JobKeeper payments to agree to:

  1. Changes to the days or times when the employee is to perform their work; and/or
  2. To take annual leave.

 

Employees can only refuse such requests on reasonable grounds.

Employers and employees can also agree to the employee taking twice as much annual leave at half the rate of pay.

The new provisions in the Fair Work Act do not allow the employer an absolute right to force employees to take annual leave. It is worth remembering that the Fair Work Act already allows employers to require award-free employees to take annual leave when the request is reasonable and that the ability for award-covered employees to be required to take annual leave is provided for in their award (if the award is silent, no ability will exist, although such employers will now be able to rely on the JobKeeper amendments to the Fair Work Act to request employees to take annual leave).

In essence, employees continue to accrue their normal amount of leave even when hours are reduced and there is an obligation to maintain their current hourly rate of pay (although of course, the number of hours they are to be paid can be reduced, subject to the rule that they must be paid at least $1,500 per fortnight).

 

For our more detailed guidance on the JobKeeper subsidy, you may wish to read our JobKeeper Payment & Direction knowledge base & FAQs page.

Types of JobKeeper Enabling Directions

1. JobKeeper Enabling Stand Down Direction

To implement a JobKeeper Enabling Stand Down Direction the certain conditions must be satisfied including:

  • the employee must not be able to be usefully employed for the employee’s normal days or hours 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.

 

Unlike the existing stand down provisions in the Fair Work Act 2009, there is no need to satisfy a requirement that there is a stoppage of work.

This will, therefore, assist employers whose right to stand down employees without pay was uncertain due to there being a downturn, rather than complete stoppage of work.

It also means that an employer can choose to reduce an employee’s hours (without completing standing them down). No such ability previously existed in legislation – this was only possible through an agreement with the employee.

 

2. JobKeeper Enabling Direction to Change Employees’ Duties

A JobKeeper Enabling Direction can be used to change an employee’s duties. Such a direction can only be given if the employer has a reasonable belief the direction is necessary to continue the employment of the employee. In other words, if it is possible to continue to employ an employee doing their current duties, the direction cannot be given.

Employers would be well advised to document their reasoning for needing to change duties.

 

3. JobKeeper Enabling Direction to Change an Employees’ Location of Work

A JobKeeper Enabling Direction can be used to change an employee’s location of work (e.g. to work from home).

Such a direction can only be given if the employer has a reasonable belief the direction is necessary to continue the employment of the employee. In other words, if it is possible to continue to employ an employee in their current work location, the direction cannot be given.

Employers would be well advised to document their reasoning for needing to change the location of work.

 

Requirements for implementing JobKeeper Enabling Directions

There are five main requirements:

  1. The direction must be reasonable;
  2. Three (3) days written notice of the intention to implement a direction must be provided;
    • The requirement in the Fair Work Act is that the employer must give the employee written notice of the employer’s intention to give the direction at least 3 days before the direction is given (unless the employee agrees to a lesser notice period).
  3. The employer must consult the employee (or their representative) about the direction they are intending to give;
    • There are no rules about what the consultation should involve, but common-sense would imply that the proposed direction should be discussed with the employee and any views they have should be considered before a final decision is made. The consultation can happen in the three day notice period,
    • A written record of the consultation must be kept.
  4. The final direction must be in writing;
    • Given the requirement that the final direction must be in writing, it is clear that two written documents are required to be implemented: the first to give notice of the intention to give the written direction; the second to confirm the actual notice being given.
  5. The Jobkeeper enabling direction can remain in force up to 28 September 2020.

Agreement to change days or times work is performed

An employer may request an employee to perform their work at different days or times. The request must not have the effect of reducing the number of hours the employee works.

Note: The Fair Work Act does not specifically mention whether the request can increase the number of hours of work.

The employee must consider the request and must not unreasonably refuse the request.

 

Agreement to employee taking annual leave

An employer may request an employee to take annual leave, so long as the employee will have at least two weeks annual leave remaining after the leave is taken.

The employee must consider the request and must not unreasonably refuse the request.

An employer and an employee may also agree in writing to the employee taking twice as much paid annual leave, at half the employee’s rate of pay (this is not subject to the proviso that the employee cannot unreasonably refuse – it, therefore, seems the employee has free reign as to whether to agree to taking twice amount as annual leave. Equally, there is no obligation on an employer to agree to a request from an employee).

 

Requirements relating to requests and agreements

There does not appear to be any requirement for the employer’s requests to be in writing (although we would advise that it would be best practice to do so). However, the Fair Work Act stipulates that all agreements made under these provisions must be made in writing.

 

What if an employee unreasonably refuses an employer’s request?

There is a power for employers (and employees) to apply to the Fair Work Commission to deal with any disputes relating to the new provisions. This would appear to apply to any disputes about an employee unreasonably refusing an employer’s request under these provisions.

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