On 24 August 2020, Minister for Industrial Relations, Christian Porter, announced that the ‘JobKeeper enabling directions’ would be extended beyond 28 September 2020 to 28 March 2021. The reason behind the extension was due to the announcement of JobKeeper 2.0 and the extension of the JobKeeper wage subsidy scheme to 28 March 2021. The changes will come into effect on 28 September 2020 as the Coronavirus Economic Response Package (JobKeeper Payments) Amendment bill 2020 (Amendment Bill) was passed through Parliament on 1 September 2020.
What is the JobKeeper Enabling Direction?
JobKeeper is a scheme that subsidises the wages paid to employees by businesses that are impacted by the Coronavirus pandemic. The JobKeeper enabling directions were introduced as amendments to the Fair Work Act 2009 (Cth) (‘the Act’) and allowed employers, who qualified and signed up to the JobKeeper scheme, to give certain directions to employees.
The three “jobkeeper enabling directions” are:
- stand down directions;
- directions changing duties; and
- direction changing the location of work.
Stand down directions permit an employer to direct an employee to work reduced hours, on different days or for a lesser period. The direction regarding change of duties allows an employer to direct an employee to perform any duties within the employee’s skill and competence and the direction regarding a change of work location means that an employer may direct an employee to work at a place different from the employee’s normal place of work, including the employee’s home.
There are certain changes that extend the ability of eligible employers to continue to make JobKeeper enabling directions.
The amendments have separated employers into two tiers:
- Qualifying employers: being those employers that meet the eligibility criteria to continue to receive JobKeeper after 27 September 2020 (see our separate article); and
- Legacy employers: being those employers that do not meet the criteria for JobKeeper payments after 27 September 2020, but did qualify and receive payments under JobKeeper until 27 September 2020 and can demonstrate a 10% drop in turnover.
Legacy employers are not able to give a JobKeeper enabling direction that reduces the employee’s ordinary hours by more than 60% of what they were at 1 March 2020 or to direct the employee to work less than 2 consecutive hours per day. Qualifying employers are not restricted to this limit and can still give a JobKeeper enabling stand down direction to an employee to reduce that employee’s ordinary hours, including to zero.
Legacy employers are required to satisfy the 10% drop in turnover test by obtaining a ‘10% decline in turnover certificate’ from an eligible financial services provider that evidences that there has been at least a 10% decline in turnover
The 10% decline in turnover test requires that to give a JobKeeper enabling direction:
- between the dates of 28 September 2020 to 27 October 2020 (inclusive) a legacy employer must evidence a 10% decline in turnover for the quarter ending 30 June 2020 (months of April, May and June 2020) compared to the June 2019 quarter.
- between the dates of 28 October 2020 to 27 February 2021 (inclusive) a legacy employer must evidence a 10% decline in turnover for the quarter ending 30 September 2020 (months of July, August and September 2020) compared to the September 2019 quarter; and,
- between the dates of 28 February 2021 to 28 March 2021 (inclusive) a legacy employer must evidence a 10% decline in turnover for the quarter ending 31 December 2020 (months of October, November and December 2020) compared to the December 2019 quarter
The above dates align with the Business Activity Statement (BAS) lodgement dates for each completed quarter.
Legacy employers with a JobKeeper enabling direction in place must obtain 10% decline in turnover certificate for each subsequent quarter for the direction to continue to operate in each subsequent quarter. If the legacy employer does not obtain the relevant certificate for a quarter, then the direction will cease to operate on 28 October 2020 or 28 February 2021 (as appropriate).
Eligible financial services providers can include a registered company auditor or a registered tax agent, BAS agent or tax (financial) adviser or qualified accountant. If the employer is a small business employer with fewer than 15 employees, they are able to self-certify. A small business can self-certify by way of a statutory declaration given by the employer, or a person who has knowledge of the business affairs of the employer to the effect that there has been a 10% decline in revenue for a designated quarter.
If employers continue to enforce JobKeeper directions but fail to meet the 10% test can result in penalties of up to $13,200 for an individual and $66,600 for body corporates.
The procedure for giving JobKeeper Enabling Directions remains the same. The employer must:
- notify the employee in writing at least 3 days before giving the Direction;
- consult with the employee (or their representative) about the Direction and keep a record of the consultation with the employee; and,
- give the employee the Direction in writing.
Any Direction given to an employee is temporary and will continue until the employer revokes the Direction, a new Direction is given, or 28 March 2021 when JobKeeper 2.0 is scheduled to end.
Employers should note that they can face significant penalties if they do not notify employees that a Direction is continuing or ceasing each quarter.
What should I watch out for?
Employers need to be mindful of the changes to the Direction provisions in the Act. In particular, the amendments to section 789GK, which now contains an additional note at the end of the section relating to Directions that may be “unreasonable”. Section 789GK provides that a Direction given to an employee by an employer will not apply “if the direction is unreasonable in all of the circumstances”.
To assist in providing guidance as to the definition of “unreasonable” in these circumstances, the Parliament have inserted a ‘note’ into section 789GK that provides an example of a situation where the Direction may be unreasonable.
The first note in this section sets out that the Direction may be unreasonable depending on the caring responsibilities the employee may have. A second note has now been inserted that outlines that in the event that a Direction relates to a reduction of hours that an employee works, the Direction may be considered unreasonable if the Direction has an unfair effect on some employees in a particular category, when compared to other employers in that same category, who are subject to the same Direction.
The lesson for employers to draw on the above is that meaningful consideration and consultation needs to be made with each employee that will be the subject of a Direction. Failure to do so may result in the Direction being found to be “unreasonable” and therefore of no effect.
This publication is produced by Pigott Stinson. It is intended to provide general information only. The contents of this publication do not constitute legal advice and should not be relied upon as legal advice. Formal legal advice should be sought from us in respect of the matters set out in this publication. Liability limited by a scheme approved under Professional Standards Legislation.