The Jobkeeper Scheme: Fair Work Act

The content of this publication has been prepared based on material available to date (27 July 2020). The material in this guide is of a general nature and should not be regarded as legal advice or relied on for assistance in any particular circumstance or situation. In any important matter, you should seek appropriate independent professional advice in relation to your own circumstances. Master Builders Australia or any of its State or Territory Association Members (collectively ‘Master Builders’) accepts no responsibility or liability for any damage, loss or expense incurred as a result of the reliance on information contained in this guide.

What flexibilities are provided under the JobKeeper changes?

The changes made to the FW Act give employers temporary powers to implement flexibility measures in order to save jobs.

These powers allow employers to:

  • issue JobKeeper enabling directions, including directions requiring to employees to:
    • work reduced hours or days (a JobKeeper enabling stand down direction);
    • undertake alternate duties; or
    • work at an alternate location;
  • make JobKeeper requests, including requests that:
    • employees work on different days or alternate hours of work;
    • employees take accrued annual leave; and
  • make JobKeeper agreements with employees for annual leave to be taken at half pay.

What is a JobKeeper enabling request?

Employers can request employees to work reduced days or alternate hours of work, and request that employees take accrued annual leave (provided that their leave balance does not reduce to below 2 weeks).

If an employer makes such a request of an employee, the employee must not unreasonably refuse the request.

What is a JobKeeper enabling stand down direction?

A JobKeeper enabling stand down direction allows an employer to direct an employee to:

  • not work on a day or days on which the employee would usually work; or
  • work for a lesser period than the period which the employee would ordinarily work on a particular day or days; or
  • work a reduced number of hours (compared with the employee’s ordinary hours of work), including reducing hours to nil.

During a JobKeeper enabling stand down, the employer must:

  • pay the employee each fortnight at least the greater of:
    • the $1500 JobKeeper payment; or
    • the amounts payable to the employee in relation to the performance of work during the fortnight (including all wages, allowances, loadings, penalties, etc.); and
  • not reduce the employee’s ordinary hourly rate of pay for each hour of work performed.

However, a JobKeeper enabling stand down direction can only be given, among other restrictions, if the employee cannot be usefully employed for their normal days or hours of work because of changes to business attributable to:

  • the COVID 19 pandemic; or
  • Government initiatives to slow the transmission of COVID 19.

When a JobKeeper enabling stand down direction is given to an employee, the employer must not unreasonably refuse a request by that employee:

  • to engage in reasonable secondary employment; or
  • for additional training or professional development.

How does an employer know if an employee cannot be “usefully employed”?

This situation arises when an employee has no useful work available to perform because of the COVID-19 pandemic or because of the Public Health Orders and Directions (however described in each State and Territory) imposing restrictions on individuals and businesses.

Useful work does not have to be the work that the employee ordinarily performs but needs to be genuine productive work that provides a “net benefit” to the employer. Employers should be able to demonstrate that the impacts of the virus or the Government’s measures to deal with it have caused the fact that there is no useful work available for the period the employee is stood down.

What are the other types of JobKeeper enabling directions?

Two other types of JobKeeper enabling directions are available to employers, being a direction to

  • undertake alternate duties; or
  • work at an alternate location.

For all three JobKeeper Enabling Directions, an employer must follow the appropriate procedural steps (set out in the question out below). Annexure B also contains an employer checklist for giving direction under the new provisions.

When can an employer alter an employee on JobKeeper’s location of work?

An employer can direct an employee who qualifies for JobKeeper and is entitled to payments to perform their duties at a place different to their normal workplace including the employee’s home provided that:

  • The place is suitable for the employee’s duties
  • The performance of the duties at that place is generally safe and specifically safe having regard to the nature and spread of COVID-19.
  • The performance of the duties at that place is reasonably within the scope of the employer’s business operations.

AND the employer has information before them that leads them to reasonably believe that this JobKeeper direction with respect to location of work is necessary to maintain the employment of the employee.

(Note: “Necessary” should not be considered as merely desirable or preferred, but actually “necessary” or “but for” directing the employee to a different work location, the employee would be made redundant.)

When will changing an employee’s duties be considered “necessary” to maintain the employment of the employee?

The employee needs to have actual factual information before them that leads them to reasonably believe that it is necessary.

 EXAMPLE: Direction to change usual duties

Judy runs a Melbourne warehouse business. Judy’s business is affected by COVID-19 and qualifies for the JobKeeper Program. Judy employs Richard as a full-time leading hand.

Given the downturn Judy no longer needs Richard to perform his leading hand duties. Instead, Judy directs Richard to carry out forklift driving duties temporarily. Judy is able to make this direction because:

§  Richard has experience driving forklifts and holds the appropriate licenses.

§  The driving duties are safe and can be performed with appropriate social distancing measures in place.

§  The driving duties are within the scope of the warehouse’s business.

Under this change, Richard is doing duties of a lower classification, with a lower base rate of pay under the applicable award. As a result, Richard’s rate of pay does not change – the base rate of pay that applied to his previous duties to continue to apply.

Richard’s other employment conditions have also not changed (such as hours and days of work).

What are the rules employers must follow when issuing JobKeeper enabling directions to employees?

JobKeeper enabling direction given to an employee to stand down, undertake alternate duties or work at an alternate location, will be of no effect if either:

  • if the direction is unreasonable in all of the circumstances; or
  • the consultation obligation has not been complied with.

The consultation obligation for JobKeeper enabling directions requires an employer:

  • to give an employee at least 3 days’ written notice of its intention to issue the direction; and
  • to consult with the employee (or their representative) prior to giving the direction.

JobKeeper enabling direction given to an employee to undertake alternate duties or work at an alternate location, will also be of no effect unless the employer has information before them that leads them to reasonably believe that the direction is necessary to continue the employment of one or more employees of the employer.

All JobKeeper enabling directions will cease to have effect at 12.00 am on 28 September 2020, unless removed prior to that time.

Do JobKeeper directions need to be in writing?

A JobKeeper direction must be given to an employee in writing (this could include by electronic means) and in a form set out in the regulations (note this is not yet published).

Does an employee have to follow a JobKeeper direction given by an employer?

Yes, employees must comply with a JobKeeper employer direction unless the direction is unreasonable in all the circumstances (this could for example, depend on its impact on an employee’s caring responsibilities). Where a direction is unreasonable it does not apply to an employee.

Can an employer give a JobKeeper direction which has the effect of making an employee redundant?

No, a JobKeeper direction cannot amount to redundancy.

What happens if there is a dispute or disagreement?

Employers, employees and their representatives may raise disputes with the Fair Work Commission (FWC) about JobKeeper requests and directions.

The FWC may deal with disputes in whatever way it sees fit, including by arbitration (meaning that it can make decisions that are binding on the parties).

In dealing with a dispute, the FWC must take into account fairness between the parties concerned.

What protections exist to stop workplaces exploiting or abusing JobKeeper enabling directions?

An employer will be subject to stiff fines (up to $63000 per contravention for companies and up to $12600 per contravention for an individual) if it tries to give a JobKeeper enabling direction that the legislation does not allow and the employer knew that this was the case.