The Jobkeeper 2.0 legislation giving effect to the extension of the JobKeeper scheme was passed by Parliament on 1 September 2020.
JobKeeper 2.0 legislation: Rules about Fair Work Act flexibilities confirmed
We now have clarity on how the current amendments to the Fair Work Act – which at the moment allow employers to reduce JobKeeper employees’ hours (potentially to zero hours) through a JobKeeper Enabling Stand Down Direction and/or request employees to take annual leave – will operate post 28 September 2020.
The key points are summarised within the below video (3.30 view time) and article:
Annual leave flexibility will cease on 28 September 2020
The new JobKeeper 2.0 legislation makes it clear that the current ability for employers to request JobKeeper employees to take annual leave – and for employees only to be able to refuse the request on reasonable grounds – will end on 28 September 2020.
This means that after this date the “old law” regarding requiring employees to take annual leave will again apply.
In essence, this will mean:
- Award-free employees can only be required to take annual leave when the request is reasonable;
- Employees covered by a modern award or enterprise agreement can only be required to take annual leave in accordance with the provisions in the award or enterprise agreement. In most modern awards this means that employees can only be required to take annual leave when they have at least 8 weeks of leave accrued.
Employers currently within the JobKeeper scheme may wish to consider whether they should use the current annual leave flexibility provisions in the Fair Work Act before the 28 September 2020 when this power is removed (to allow them to reduce employees’ leave balances and subsidise the costs through JobKeeper).
Employers remaining within JobKeeper scheme
Employers remaining within the JobKeeper scheme post-September can continue to use the existing JobKeeper flexibilities (apart from that relating to annual leave which is ceasing for all employers).
This includes the ability to:
- reduce employee’s hours of work (including to zero hours);
- require employees to perform different duties and from different locations;
- request employees to agree to work their hours different times and days (such request cannot be unreasonably refused).
Employers who have taken steps to reduce employee’s hours through a written JobKeeper Enabling Stand Down Direction should consider whether they need to extend the period of reduced hours / stand down as, prior to the new legislation being introduced, the ability to reduce employee’s hours was due to end on 28 September 2020.
If an employer previously provided an employee with a written JobKeeper Enabling Stand Down Direction expressed to continue “until 28 September 2020” then the employee may need to be provided with a further written direction.
Employers leaving the JobKeeper scheme after 28 September 2020
Many employers will cease to be eligible for JobKeeper after 28 September 2020, because they will fail to meet the decline in the turnover test (of 30% for most businesses) in the June to September 2020 quarter (compared to the corresponding quarter in 2019).
Others may continue to be eligible for JobKeeper 2.0 for the October to December 2020 quarter but will cease to be eligible for the January to March 2020 quarter.
The new JobKeeper 2.0 legislation states that these employers (referred to as “legacy employers” in the legislation) will not be able to rely on any of the Fair Work Act flexibilities post-September 2020 unless they have a certificate from an accountant (or another authorised person) stating they have experienced a 10% decline in turnover in the applicable periods. (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).
For legacy employers unable to meet the 10% decline in the turnover test, their employees who have had their hours reduced through a JobKeeper Enabling Stand Down Direction will need to be returned to their usual hours as of 28 September 2020 (unless an alternative arrangement can be agreed with the employee).
The decline in turnover provisions require legacy employers to obtain separate certificates confirming a 10% decline in turnover for the following periods if they wish to able to rely on the (more limited) Fair Work Act flexibilities throughout Jobkeeper 2.0:
- to use JobKeeper flexibilities up 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 flexibilities 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 flexibilities 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.
We will be providing more detailed information about the decline in turnover requirements in due course.
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, including:
- 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.
- Legacy employers must also give a longer period of notice before giving a JobKeeper enabling direction – 7 days rather than 3, and have expanded consultation requirements.
* The explanatory note to the legislation makes clear this provision is only aimed at full-time and part-time employees, and that employers always have the right to vary casual employees’ hours of work without relying on a stand down provision.
If you are an employer who will cease to be eligible for JobKeeper after 28 September 2020 and would like to understand more about your rights and obligations, please do not hesitate to contact us.
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The information provided in these blog articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.