COVID-19 Edition 6: JobKeeper - For Employers
On 8 April 2020 the COVID-19 Emergency Response Act 2020 was passed by both Houses of the Commonwealth Parliament inter alia, to assist businesses to continue to operate during the COVID- 19 Crisis. This Legislation has also resulted in amendments to the Fair Work Act 2009 ("the Fair Work Act"). The JobKeeper payment is available to eligible employers to enable them to pay their (eligible) employee's salary or wages of at least $1,500 (before tax) per fortnight. If an employer fails to pay an employee, the employer will not receive the $1,500 per fortnight payment. While the JobKeeper payments introduce flexibility for employers, it is important to note employers do not get to pick and choose which employees receive the JobKeeper payments.
Employers should seek legal advice before issuing JobKeeper stand-down notices and terminating employees. It is also important to note that the new JobKeeper provisions in the Fair Work Act do not give an employer new rights to make an employee redundant or to dismiss them unfairly and employers must continue to observe the relevant provisions of an award or enterprise agreement. Other points to note about the JobKeeper payment are:
- Employers cannot increase working hours to take their wage to $1,500 per fortnight without an employee's consent which must be freely given. Attempting to coerce an employee to work longer hours than their typical hours may be a breach of the Fair Work Act;
- A period of time when an employee is the subject of a JobKeeper direction still constitutes service. If an employee is stood down or directed to take annual leave under a JobKeeper direction, they will still accrue leave entitlements. These entitlements will accrue at the employee's ordinary hours of work as if the JobKeeper direction had not been issued. This means a full-time employee working 20 hours per week will still accrue leave entitlements at their full-time rate. This period of time will also need to be included when calculating an employee's entitlement to notice of termination or redundancy entitlements;
- Contraventions of the new JobKeeper law in the Fair Work Act are subject to civil penalties and we recommend that an employer obtain legal advice before issuing any JobKeeper directions to staff;
- Employees, employee organisations and Fair Work Inspectors will have standing to bring a claim about suspected contraventions of the JobKeeper provisions in the Federal Court, the Federal Circuit Court or eligible State or Territory courts;
- New amendments to the Fair Work Act provide a sunset clause for the JobKeeper provisions to 28 September 2020 and any direction or agreement still in place at that date will cease to have effect.
Legislation passed by the Victorian Parliament on 16 March 2020 declaring Victoria a state of emergency enables the Chief Medical Officer to issue directions to businesses which limit recreational, cultural and entertainment activities. These directions must be followed else the business risks being issued fines by the Victorian Police. Similarly, the JobKeeper legislation and new regulations passed by the Commonwealth Government on 9 April 2020 means the Courts can issues civil penalties against employers if they do not implement new procedures such as:
- Requirements for employers to keep records of any consultation about a direction, and also make a written record of the direction;
- If an employee does not follow a JobKeeper direction, an employer can refer the matter to the Fair Work Commission.
Finally, the JobKeeper legislation also contains integrity provisions and the existing administrative penalties and tax and criminal offence provisions will also apply to offences under the new legislation. If an employer enters into a scheme for the sole or dominant purpose of obtaining a JobKeeper payment, the Australian Tax Office (ATO) Commissioner will have the power to determine that the employer was never entitled to a payment, or to reduce the amount of the entitlement, and to do so retrospectively. The ATO Commissioner will also be able to recover any overpayments and have the power to impose significant penalties and interest. The integrity provision is aimed at contrived and artificial arrangements that technically satisfy the eligibility requirements but have been implemented for the sole or dominant purpose of obtaining or increasing JobKeeper payments.