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As anticipated, on 8 April 2020, the Federal Parliament passed the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 and related legislation which establishes the JobKeeper wage subsidy scheme and introduces greater flexibility for employers by way of approved directions and agreements.
The JobKeeper wage subsidy is intended to support employers and employees who have been impacted by economic downturn in the wake of COVID-19. Qualifying employers will receive a payment (fortnightly in arrears) of $1,500 per fortnight for each eligible employee for a maximum of 13 fortnights. JobKeeper qualifying employers will have to meet minimum payment obligations to eligible employees, including passing on the full value of payments the employer receives each fortnight, as well as any excess amount the employee is entitled to receive for work performed.
The rules regarding the eligibility criteria for employers and employees as well as how applications and payments under the scheme will be made have not yet been released. However, the Government has stated that an employer will be eligible where their business:
Sole traders, self-employed people, partnerships and trusts will also be eligible should they meet the turnover test above. Charities registered with the Australian Charities and Not-for Profit Commission will be eligible if they estimate their turnover has, or will likely, fall by 15 per cent or more relevant to a comparable period.
The Government has stated that eligible employees are intended to be current full-time workers, part-time workers, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020) or those rehired after being made redundant, all of whom must who over 16 years of age and by Australian citizens or holders of specified visas.
The legislation will introduce a number of JobKeeper payment rules, including but not limited to the following:
Directions and Agreements
The legislation amends the Fair Work Act 2009 to temporarily enable employers who qualify for JobKeeper Payments (Qualifying Employers) to give directions to eligible employees. These directions include:
The legislation also allows an employer to request that an employee make an agreement to take twice as much annual leave at half pay, but without reducing the employee’s annual leave balance below 2 weeks’ leave. An employee must consider the request, and must not unreasonably refuse the request.
These directions and agreements override any applicable term of the employee’s employment to the contrary, including terms under an enterprise agreement or award.
Qualifying Employers will have a number of responsibilities under the legislation, including:
Hourly Rate of Pay Guarantee
A JobKeeper enabling stand down direction cannot reduce an employee’s hourly base rate of pay. Where an employer gives an employee a JobKeeper enabling stand down direction the employee’s base rate of pay worked out on an hourly basis must not be less than the base rate of pay that would have been applicable to the employee if the direction had not been given.
Where an employer gives a direction for alternative duties or work, the base rate of pay must not be less than either the base rate of pay that would have applied if the direction had not been given or the base the rate of pay applicable to the duties the employee is required to perform, whichever is greater.
A JobKeeper enabling stand down direction does not apply while an employee is taking paid or unpaid leave authorised by the employer (for example, annual leave), or is otherwise authorised to be absent (for example, on a public holiday). Employees continue to accrue annual leave and personal leave as if the stand down direction was not given.
Employers who breach these new provisions can be liable for criminal in certain circumstances and civil remedy penalties of up to $630,000 for a non-compliant direction.
The FWC will have jurisdiction to deal with disputes regarding the operation of these new provisions and will have power to make orders to set aside a JobKeeper direction, make any other order it considers desirable to give effect to a JobKeeper Enabling Direction, or make any other order it considers appropriate.
Employers should consider how they can take advantage of these changes to off-set the impact of COVID- 19 and seek specific advice given the various employer obligations in respect of JobKeeper directions and agreements, including where an employer has already stood down all or part of its workforce.
With much recent debate at the Federal and State level about criminalising employee underpayments, on 16 June 2020, the Victorian Parliament passed the Wage Theft Bill 2020.
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