Summary

The second phase of JobKeeper (“JobKeeper 2.0”) commences on 28 September 2020.

There are new rules about the operation of JobKeeper Enabling Directions under this phase of JobKeeper.

Previously under the JobKeeper scheme that ran from 30 March to 27 September 2020 (“JobKeeper 1.0”), employers could issue employees eligible for JobKeeper, a “JobKeeper Enabling Direction” 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.

 

Employers could 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. Take annual leave.

 

Employees could only refuse such requests on reasonable grounds.

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

Under JobKeeper 2.0 employers have different rights in respect of JobKeeper Enabling Directions (and making the requests and agreements with employees mentioned above) depending on whether they continue to be eligible for JobKeeper, as set out below.

 

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

 

Employers eligible for JobKeeper 2.0 –  “Qualifying Employers”

Employers who are eligible for JobKeeper 2.0 (either for the first time or as a continuation of JobKeeper 1.0) are referred to as “Qualifying Employers”.

They have the same rights as they did in respect of JobKeeper 1.0, except that there is no longer an ability to request employees to take annual leave under the JobKeeper provisions.

This means that in respect of annual leave the normal rules apply. For award-covered employees, this will generally mean that employees can only be required to take annual leave where they have leave balances of at least 8 weeks. For award-free employees, employers can require them to take annual leave when the request is reasonable.

It is also no longer possible for employers to agree to employees taking twice as much annual leave at half the rate of pay.

The powers in relation to the other JobKeeper Enabling Directions / Requests remain the same, ie employers can still:

  1. Reduce employees’ hours of work (including reducing their hours to nil, i.e. “standing them down”)
  2. Alter the duties to be performed by the employee;
  3. Change the location from which the employee performs their work; and/or
  4. Request employees to change the days or times when the employee is to perform their work (which cannot be unreasonably refused).

 

Where an employer has previously issued a JobKeeper Enabling Direction to an employee prior to 28 September 2020, this will continue to operate in the new phase of JobKeeper, although we would advise employers it would be best practice to issue employees a written notice that this is happening.

We have prepared template letters for this purpose:

 

Download Employment Innovations' free JobKeeper 2.0 template resources

 

Other requirements detailing the requirements for issuing a JobKeeper enabling direction are set out later in this article.

 

Employees who were eligible for JobKeeper 1.0 but who will not be eligible for JobKeeper 2.0, but who satisfy a 10% decline in the turnover test – “Legacy Employers”

There will be some employers who were eligible for JobKeeper 1.0 but will not be eligible for either or both of the JobKeeper 2.0 phases (28 September 2020 to 3 January 2021; 4 January 2021 to 28 March 2021).

For these employers, they will only be able to make use of (a more limited range of ) JobKeeper Enabling Directions / Requests if they can satisfy a 10% decline in turnover test at the relevant time. These employers are referred to as “Legacy Employers”.

Legacy Employers must obtain a Decline in Turnover Certificate if they wish to able to issue Directions / Requests throughout Jobkeeper 2.0 as follows:

  • to use JobKeeper Directions / Requests between 28 September 2020 to 27 October 2020, a Legacy Employer must have a 10% Decline in Turnover Certificate for the June 2020 quarter (April, May and June 2020) compared to the June 2019 quarter;
  • to use JobKeeper Directions / Requests between 28 October 2020 and 27 February 2021, a legacy employer must have a 10% Decline in Turnover Certificate for the September 2020 quarter (July, August and September 2020) compared to the September 2019 quarter); and
  • to use JobKeeper Directions / Requests between 28 February 2021 and 28 March 2021 (inclusive), a legacy employer must have a 10% Decline in Turnover Certificate for the December 2020 quarter (October, November and December 2020) compared to the December 2019 quarter.

 

If employers have a Decline in Turnover Certificate at the relevant time, they will be able to utilise a more reduced set of measures than before, namely:

  • requiring employees to perform different duties and from different locations (as is currently the case);
  • requesting employees to work their hours at different days or times (employees cannot unreasonably refuse), but with a new requirement that employees must be given at least two consecutive hours of work on any day, work is performed;
  • issuing a JobKeeper Enabling Stand Down Direction to reduce employees’ hours, but only to a minimum of 60% of the employee’s ordinary hours as they were on 1 March 2020. Such a direction cannot result in the employee working less than 2 consecutive hours in a day.

 

A Decline in Turnover Certificate can be obtained from a BAS agent, tax agent or an accountant. There is an exemption for small businesses with less than 15 employees who can provide a statutory declaration of the decline in turnover, rather than provide a certificate. We have a statutory declaration template, along with other JobKeeper 2.0 templates available for download.

The assessment of the number of ordinary hours the employee worked at 1 March 2020 is not the actual ordinary hours worked, but rather what number of ordinary hours they were contracted to work.

For award/agreement free employees – this will be the ordinary hours set out in their contract, or if not set out in their contract: 38 hours for full-time employees or the usual weekly hours for part-time employees.

For employees covered by a modern award or enterprise agreement, employers must look at provisions of modern award or enterprise agreement to calculate ordinary hours (likely to be 38 for full-time employees, agreed weekly hours for part-time employees).

On 17 September 2020, the Government passed further legislation (the Fair Work Amendment (Jobkeeper Payments) Regulations 2020) which clarifies that:

  • Where an employee’s ordinary hours have changed on or after 1 March 2020 for a reason unrelated to COVID-19, it is the changed hours that are deemed to be the ordinary hours for the assessment of the 60% of ordinary hours test;
  • Where an employee was not employed as of 1 March 2020, it is the number of ordinary hours at the commencement of employment (or the number of ordinary hours if changed since then for non-COVID-19 reasons) that are used for the 60% test.

 

Casual employees do not have ordinary hours, and employers, therefore, do not need to utilise a JobKeeper Enabling Stand Down Direction for casuals.

Legacy Employers are also obliged to update any employees in writing about whether or not a JobKeeper Enabling Direction will apply to them for each of the three periods stated above. This update must be provided prior to 28 September 2020 (for the first period), prior to 28 October 2020 (for the second period) and prior to 28 February 2021 (for the third period). We have a template letter for this purpose available here.

Other requirements detailing the requirements for issuing a JobKeeper enabling direction are set out later in this article.

 

Employers who were eligible for JobKeeper 1.0 but who will not be eligible for JobKeeper 2.0, and who do not satisfy a 10% decline in the turnover test

These employers will not be able to issue JobKeeper Enabling Directions or Requests. Any changes to employees’ terms and conditions (e.g. a reduction in hours) will need to be done by agreement.

Any previous JobKeeper Enabling Direction issued will cease to have an effect on 27 September 2020 and employees must return to their previous terms and conditions on 28 September 2020.

Requirements for issuing 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.

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 all JobKeeper Enabling Directions

The main requirements are as follows:

  1. The direction must be reasonable;
  2. For Qualifying Employers: 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. For Legacy Employers: 7 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 7 days before the direction is given (unless the employee agrees to a lesser notice period).
  4. The employer must consult the employee 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 or seven day notice period,
    • For Legacy Employers: if the employee has a representative (e.g. a union) they must also be consulted.
    • A written record of the consultation must be kept.
  5. 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.

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