There has been a lot of information to take in lately with all the news, restrictions and incentives. It’s fair to say that there has been panic, confusion and misinformation. It has been hard to keep up with all the announcements! This has been another challenge for affected businesses.
Legislation has now been passed by the Commonwealth Government to introduce the JobKeeper scheme, which operates between 9 April 2020 to 28 September 2020. The Fair Work Act 2009 (Cth) (the Fair Work Act) has also been amended, as well as many of the Modern Awards to enable employers to modify working conditions during the COVID-19 pandemic.
We have outlined the following important changes to assist to better understand the recent changes. If you have any specific concerns or questions, please do not hesitate to contact our office to discuss.
Stand down provisions
Eligible employers may stand down employees for some or all of their usual hours if they cannot be usefully employed due to the impact of COVID-19.
The Fair Work Act allows an employer to stand down an employee: if ‘the employee cannot usefully be employed’
and standing them down is ‘because of…a stoppage of work for any cause for which the employer cannot reasonably be held responsible.’ A mere downturn or deterioration in business or trade is not sufficient to access the stand down provisions. We recommend you seek legal advice before relying on the stand down provisions, as this is a very high bar.
If there are other opportunities to usefully employ staff, then these should be used. The employer must exhaust all other options, including working from home and/or working in an alternative role. It should be a last resort to impose the stand down provisions.
Employers are not required to pay employees during the stand down period. However, the employee may elect to take some or all of their accrued annual or long service leave entitlements during this period (subject to some restrictions).
Note that National Employment Standard (NES) entitlements, such as annual leave and long service leave, continue to accrue during a period of stand down.
Employers may be eligible to access the JobKeeper scheme, discussed further below.
Redundancy
There are restrictions on any business which makes an employee’s position redundant. The employee is entitled to receive paid notice calculated according to the length of time the employee has been employed by the business and the employee’s age.
It may be preferable for businesses to stand down employees until they know more as to what the future holds until a decision is made about redundancies. Once the restrictions are lifted, businesses will need their employees to recommence business.
Sponsored employees
The Department of Immigration announced on 4 April 2020 that 457 and 482 visa holders who have been stood down (but not made redundant) will be able to maintain their visa validity and can apply for an extension of their visa through the usual application process. The visa status does not change because the sponsored employee is still considered to be employed.
For further information, click here.
Employee quarantine
If an employee is required to self-isolate due to restrictions imposed by the government, the employer is not required to pay them during the isolation period. However if the requirement arose in the course of the employee’s duties, the employer must pay the employee during the isolation period. For example, if the employee came into contact with a person who was proven to have contracted COVID-19 during their work activities, the employer must pay the employee during self-isolation.
If an employer directs the employee to stay away from work and there are grounds to believe the employee may have been exposed to COVID-19 (but not in the course of their employment), the employee will not be entitled to be paid during the isolation period. However, if the employer directs the employee to stay away from work but the employee is well and willing to attend for work, the employer must pay the employee their usual wages.
If an employee chooses to not attend for work but is well (exceeding the government restrictions), the employer is not required to pay the employee.
As is usual, the employer is required to pay sick/carer’s leave, if an employee is unwell or is required to care for a child or another immediate family or household member. If there is insufficient leave, the employee can be required to take unpaid leave.
In any of these cases, permanent employees are entitled to be paid on public holidays.
Regardless of government requirements to self-isolate, health and safety obligations should be observed by employers.
Businesses should ensure that any discussions with employees regarding their health should be handled
confidentially and privacy laws apply.
Award variations
Many of the Awards have been varied to add the following entitlement to employees (available between 8 April 2020 and 30 June 2020):
- 2 weeks unpaid ‘pandemic leave’ who are required to self-isolate (but who are not entitled to paid leave)
- twice the amount of annual leave at half pay.
There are other changes which have recently being made and in the process of being made to specific Awards to respond to issues arising from the virus.
You can register to receive updates to the applicable award through the Fair Work Ombudsman’s website.
Variation to working conditions
Businesses should discuss options with employees in advance, to minimise the impact on them, such as:
- flexible working arrangements
- working from home
- reducing or varying hours
- accessing accrued annual and long service leave
- taking leave at half pay
There may be restrictions on businesses imposing certain variations on employees without their consent, particularly businesses which do not qualify for JobKeeper. Check the relevant Award and see information regarding JobKeeper.
Agreements to vary working conditions should be put in writing.
JobKeeper scheme legal obligations
Eligible employers who access the JobKeeper scheme must do the following:
- if the relevant employee cannot be usefully employed for their usual days or hours due to COVID-19 or government initiatives to slow transmission of COVID-19, give written directions to the relevant employee, which directions are reasonable1, to:
- stand down the employee, by directing them to not work on a day or days that the employee would
typically work - reduce the ordinary hours of work of the employee2
- vary the employee’s duties3 which is necessary to maintain continuing employment of one or more employees of the employer
or - vary the employee’s work location4 which is necessary to maintain continuing employment of one or more employees of the employer, including directing the employee to work from home
- stand down the employee, by directing them to not work on a day or days that the employee would
- consult with the employee before giving a JobKeeper enabling direction
- pay the employee for the relevant fortnight the greater of5:
- $1,500 inclusive of:
▪ salary, wages, commission, bonus or allowances paid to the employee
▪ tax withheld
▪ salary sacrifice superannuation contributions, and
▪ agreed deductions - the amount payable to the employee for the work they performed
- $1,500 inclusive of:
1 It is unclear what is considered to be ‘reasonable’, however a direction may be unreasonable if it would impact on the employee’s caring responsibilities. The directions apply to the period that they are entitled to receive JobKeeper payments for the subject employee. Any variations must be safe and within the business’s operations.
2 In this circumstance, the employee is entitled to engage in secondary employment, formal training or development.
3 The variation to duties must be within the employee’s skill, competency and hold any necessary qualifications (eg to operate a forklift, to hold a forklift licence). The duties must be safe and within the scope of the employer’s business operations. If the duties are subject to a higher rate of pay under an Award, the employee must be paid at the higher rate.
4 If the direction is to work at a place other than the employee’s home, it must not be an unreasonable distance and it must
be safe and within the employee’s business operations.
5 Employees who received less than $1,500 per fortnight (before tax) before JobKeeper will now receive minimum $1,500 per fortnight (before tax).
Agreements to vary working conditions should be put in writing.
The employee’s hourly base rate of pay cannot be reduced to less than what would have applied had the direction not been given.
Employers must still comply with unlawful termination, unfair dismissal, equal opportunity, health and safety and workers’ compensation laws.
At this stage, the JobKeeper allowance applies from 30 March 2020 to 27 September 2020.
Payments are administered by the ATO. Questions about eligibility should be directed to your accountant or to the ATO.
Applications can be made to the Fair Work Commission to deal with JobKeeper disputes in most cases.
This article contains comments of a general nature and is not intended to be relied upon. No responsibility will be accepted by the author for any loss arising from reliance on this article. Legal advice should be sought in respect to your specific circumstances.
Liability limited by a scheme approved under Professional Standards Legislation.
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