UPDATED: 18/09/2020

After much wrangling the extension of the JobKeeper program to Stage 2 & 3 now also has its companion piece, the flexibility and directions extension. This new piece of legislation extends and changes the flexibility options that are available to not only those businesses that are participating in the JobKeeper program in Stage 2 and/or 3 but also the “Legacy Businesses” that were participating in JobKeeper Stage 1, but will not be participating in Stage 2 and/or 3 (with conditions and limitations).

JobKeeper Payments Recap

The JobKeeper Wage Subsidy will provide participating businesses with a payment for each eligible participating employee, on the condition that the business pay the Wage Condition amount to the employee. For Stage 1 this was a minimum of $1,500 before tax per fortnight, however, for Stage 2 and 3 this Wage Condition is dependent on the number of hours the employee worked on average prior to one of two applicable test dates.

For more on the Wage Condition for Stage 2 and 3 please see; payment (for JobKeeper Phase 1, for more information on JobKeeper Phase 2 see; https://acapmag.com.au/2020/08/jobkeeper-stage-2-3-everything-you-need-to-know/.

JobKeeper Flexibility from 28/9/2020

Eligibility of the business and the staff for the JobKeeper program provides more than just the Payment, it also allows access to the JobKeeper Directions and Flexibility measures under modifications to the Fair Work Act (see the next section for more on this).

In changes to the Fair Work Act, brought to bare by the new companion piece of legislation, businesses that are (or were) eligible for the JobKeeper program, will be able to access the following changed options, rights, pathways and requirements, for their eligible staff.

A note of caution – while the business may be (or were) eligible for the JobKeeper program, it may only use the following special provisions, for those staff that are also (or were) eligible to receive the JobKeeper Payment.  If the business has a student visa worker, or a causal who has worked less than 12 months for example, then the business will not be able to apply the following special provisions to those employees, because they are not eligible to receive the JobKeeker Payment.

Available to National System Employers and Employees only

In addition to being available only to those businesses and staff that are (or were) eligible for the JobKeeper Payment, there is a further restriction on the access to the special provisions.  The business must be a National System Employer. 

The following are National System Employers;

  • All businesses in Victoria
  • All businesses in the Australian Capital Territory
  • All businesses in the Northern Territory
  • All private enterprises in New South Wales
  • All private enterprises in Queensland
  • All private enterprises in South Australia
  • All private enterprises in Tasmania
  • All constitutional corporations in Western Australia (including Pty Ltd companies)

Special Provisions
Flexibility

The current form of the Flexibility Provisions creates two Groups of businesses. With each having access to differing options of flexibility, and each having different obligations and requirements.

  • GROUP 1 – JobKeeper Participating Business Stage 2 and/or Stage 3
    This Group of businesses are enrolled in the JobKeeper Wage Subsidy Program and are receiving payments from the ATO for Stage 2 and/or Stage 3
  • GROUP 2 – Legacy Businesses
    This Group of businesses WERE enrolled in the JobKeeper Wage Subsidy Program for Stage 1, and have not qualified or enrolled in either Stage 2 or Stage 3 AND they hold a certificate stating that they have experienced a downturn of at least 10% in the qualifying period for Stage 2 or Stage 3

The requirements and options open to each of these Groups are very different and will be explored below separately. Caution is warranted when reading the following to ensure the business is clear on which Group they fall into at the time of reading.

GROUP 1
JobKeeper Participating Business Stage 2 and/or 3

The business can, if it and the employee are eligible and participating for the JobKeeper Payment;

  • Issue a Direction to reduce the hours of the employee.  This reduction can be a total reduction, where hours are reduced to zero and the employee is ‘stood-down’ from work, or it can be a partial reduction.
  • Issue a Direction to change the duties of the employee, provided the duties are reasonable, safe and within the scope of the business operations.
  • Issue a Direction to change the work location of the employee, provided the location is safe and within the scope of the business operations and not an unreasonable distance from the usual business location or the employees home.
  • Enter into a genuine agreement with the employee to alter the days of work.
  • Allow for staff to access additional training or undertake work for other employers.

In order to access these Special Provisions, in addition to the overarching requirement for the business and the staff member to be eligible for the JobKeeper Payment there are also other obligations.

NOTE: from 28/9/2020 the option from Stage 1 to issue a Direction to employees to take accrued annual leave, provided there will be at least 2 weeks left in the entitlement bank after the employee takes the leave has been removed and/or allow for the staff to access annual leave at ½ pay for twice the length of the entitlement. No Directions regarding annual leave may be given

Obligations to access flexibility

The business is required when accessing these flexibility;

  • To pay employees who are working their normal wage for their normal work, including superannuation, and
  • To ensure that any employee that is employed (working or not) and earning less than the applicable Wage Condition, that they get paid at least the applicable Wage Condition. This may result in a requirement to ‘top up’ from the amount worked (and paid as per dot one above) to the Wage Condition. Superannuation is optional to pay on the top up amount, and
  • To ensure that any Direction that is given is reasonable in all ways, and
  • To ensure that any Direction is given only after;
    • There has been consideration about the necessity of the Direction for the business in each individual case.  Each case (employee impacted) must be assessed completely individually, and
    • There has been a consideration of the safety and appropriateness of the Direction, and
    • There has been genuine consultation (which is documented using the official forms), and
    • There has been written notice, after the consultation, provided at least 3 days before the Direction comes into force, and
  • To ensure that any Direction is given in writing using the official form
  • To ensure that any Direction given expires either; when it is withdrawn in writing, or when it is replaced by another Direction, or when the business is no longer participating in the JobKeeper Scheme (see below for Legacy options) or the JobKeeper Scheme ends, whichever comes first, and
  • To accrue annual leave and all other entitlements for any employee that is stood-down (full or partial), as if they had not been stood-down and were in fact working, and
  • To consider any request for access to additional training or to work for other employers and not unreasonably refuse

If a business fails to meet these obligations they face steep penalties under the Act.

When a Direction has been given in accordance with these obligations the employee is required to follow the Direction.  Failure to follow the Direction could result in civil penalties to the employee under the Act as well as termination of employment.

For more on JobKeeper Participating Businesses, including forms see;

NOTE: Legacy Businesses MUST NOT use these templates – Specific Legacy Templates will be released and noted below – in order to use the templates above the business must be PARTICIPATING IN JOBKEEPER

Practicalities when accessing flexibility

For those businesses that have already effected changes onsite, like reducing hours, terminations, redundancies or stand-downs, it is time to establish is the business and staff are eligible for JobKeeper, and if the Special Provisions that are available can be activated. 

In some cases where businesses have already consulted and communicated with staff about changes to hours or stand-down (just as an example) the Obligations under this Act may require those businesses to commence another round of consultation and issue the proscribed forms and written notice to ensure that the Directions are valid.

It is very important that the business carefully consider and apply the special provisions and obligations, remembering that they can only be applied to the employees that are eligible for the JobKeeper Payment.

GROUP 2
Legacy Business

Remember this Group of businesses WERE enrolled in the JobKeeper Wage Subsidy Program for Stage 1, and have not qualified or enrolled in either Stage 2 or Stage 3 AND they hold a certificate stating that they have experienced a downturn of at least 10% in the qualifying period for Stage 2 or Stage 3.

Gaining access to flexibility provisions

In order to access the flexibility provisions Legacy Businesses will need to satisfy the conditions of;

  • previously participating in the JobKeeper Scheme, but no longer qualifying from 28 September 2020
  • demonstrating at least a 10% decline in turnover for the previous quarter, by obtaining a certificate from an eligible financial service provider, or a statutory declaration for small businesses (less than 15 employees).

All existing Directions end on 27/9/2020 and will need to be reissued if the business and employee are eligible and the Directions are accessible and needed.

All Legacy Businesses will need to notify eligible employees that are currently subject to Directions or Agreements, about the status of the Direction or Agreement and whether the business has received a certificate of downturn or has signed a statutory declaration.

Penalties for inappropriate access or use of flexibility

The penalties for inappropriately accessing or using the flexibility provisions for Legacy Businesses are steep – $13,320 for individuals and $66,600 for businesses. So it is imperative that this is accessed appropriately.

Flexibility options

A Legacy Business, that meets all of the criteria, can access the following options for those staff who were eligible for JobKeeper Payments;

  • Issue a Direction to reduce the hours of the employee.  This reduction is limited. The Direction can not result in the employee working less than 60% of their ordinary hours. The Direction is also not allowed to have the employee working less than 2 hours in a day on those days where they are working (no short shifting).
  • Issue a Direction to change the duties of the employee, provided the duties are reasonable, safe and within the scope of the business operations.
  • Issue a Direction to change the work location of the employee, provided the location is safe and within the scope of the business operations and not an unreasonable distance from the usual business location or the employees home.
  • Enter into a genuine agreement with the employee to alter the days of work. The Direction is also not allowed to have the employee working less than 2 hours in a day on those days where they are working (no short shifting).
  • Allow for staff to access additional training or undertake work for other employers.

In order to access these Special Provisions, in addition to the overarching requirement for the business to qualify as a Legacy Business and the staff member to have been eligible for the JobKeeper Payment, there are also other obligations.

Obligations to access flexibility

The business is required when accessing these flexibility;

  • To pay employees who are working their normal wage for their normal work, including superannuation, and
  • To ensure that any Direction that is given is reasonable in all ways, and
  • To ensure that any Direction is given only after;
    • There has been consideration about the necessity of the Direction for the business in each individual case.  Each case (employee impacted) must be assessed completely individually, and
    • There has been a consideration of the safety and appropriateness of the Direction, and
    • There has been genuine consultation (which is documented using the official forms), and
    • There has been written notice, after the consultation, provided at least 7 days before the Direction comes into force, and
  • To ensure that any Direction is given in writing using the official form
  • To ensure that any Direction given expires either; when it is withdrawn in writing, or when it is replaced by another Direction, or when the business is no longer eligible for the status of Legacy Business or the JobKeeper Scheme ends, whichever comes first, and
  • To accrue annual leave and all other entitlements for any employee that is stood-down, as if they had not been stood-down and were in fact working, and
  • To consider any request for access to additional training or to work for other employers and not unreasonably refuse

If a business fails to meet these obligations they face steep penalties under the Act.

When a Direction has been given in accordance with these obligations the employee is required to follow the Direction.  Failure to follow the Direction could result in civil penalties to the employee under the Act as well as termination of employment.

For more on Legacy Business see; https://coronavirus.fairwork.gov.au/coronavirus-and-australian-workplace-laws/pay-and-leave-during-coronavirus/jobkeeper-wage-subsidy-scheme/legacy-employers.

For more on Legacy Business Directions see – https://coronavirus.fairwork.gov.au/coronavirus-and-australian-workplace-laws/pay-and-leave-during-coronavirus/jobkeeper-wage-subsidy-scheme/legacy-employers/jobkeeper-enabling-directions-and-agreements-for-legacy-employers

Templates to be released shortly and will be added here once released

Summary

There have been changes to the options available to businesses for the setting of hours, tasks and location, as well as a framework for the agreement of additional items like days of work, annual leave and taking a second job, or more training.  It is vital that all businesses understand that these changes are not universal in application to businesses or staff.  They are temporary, and they are only available to those businesses who are eligible, and to those staff who are eligible for the JobKeeper Payment, and change significantly depending on. 

This means that there will be the potential for two systems to be running in the same business, where some staff are eligible and others are not.  This also means that some businesses will not, because they are not eligible for the payment or are not meeting the turnover reduction for Legacy, be able to access these flexibility provisions.  Those businesses will still have access to the traditional methods, including changes made by genuine agreement as well as changes made as the result of a restructure. 

ACAPMA is here to answer your questions and guide you through the complexity.  Members are reminded to reach out to employment@acapma.com.au with any questions.

ACAPMA

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