The JobKeeper Payment fact sheet 5 - Making changes to working arrangements
April 15, 2020
Under the JobKeeper Scheme the Government will pay eligible employers a wage subsidy, being a flat payment of $1,500 per fortnight per employee for up to 6 months. You must pay your employees the full wage subsidy, being a minimum of $1,500 per fortnight, before tax.
Once a business is eligible, the JobKeeper Scheme also provides employers with access to a range of measures to temporarily provide greater flexibility in relation to hours of work, called JobKeeper enabling directions. Greater flexibility has also been introduced regarding the taking of annual leave.
This webinar provides a brief overview of the JobKeeper Payment and explains the changes that can be made to working arrangements once an employer and employee are eligible for the JobKeeper Payment.
Q. What is a JobKeeper enabling direction?
A JobKeeper enabling direction provides eligible employers the ability to:
- Issue a JobKeeper enabling stand down direction.
- Make changes to hours of work, the performance of duties and the location or work.
These directions to employees must not be “unreasonable in all of the circumstances”. What is “unreasonable in all of the circumstances” is a very broad test and requires a consideration of anything relevant including the personal circumstances of the employee concerned.
Q. What is a JobKeeper enabling stand down direction?
An eligible employer may issue a JobKeeper enabling stand down direction to an eligible employee to:
- not work on particular days,
- work for a lesser period or for fewer hours than the employee would ordinarily work, or
- work no hours.
The employee is not to be paid for work that is not performed.
This direction can only be issued if:
- The employee cannot be usefully employed for their normal days or hours because of changes to the business attributable to COVID-19, or government initiatives to slow the transmission of COVID-19; and
- Can be implemented safely, having regard to the nature and spread of COVID-19.
A JobKeeper enabling stand down direction cannot reduce an employee’s hourly rate of pay.
How do I know an employee cannot be usefully employed?
This situation arises when an employee has no (or a reduced level of) 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 benefit to the employer. You 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 none, or less useful, work available.
When does a stand down direction not apply?
A stand down direction does not apply to the employee during a period when the employee is:
- Taking paid or unpaid leave that is authorised by the employer.
- Otherwise authorised to be absent from the employee’s employment
I have already stood down my employees – am I eligible for the JobKeeper Payment?
Eligible employers who stood down their employees before the commencement of the scheme will be able to participate.
Employees that are re-engaged by a business that was their employer on 1 March 2020 will also be eligible.
Example: Sarah is employed as a full time contracts administrator by McMansion Building Services. Due to the impact of COVID-19 McMansion Building Services has experienced a downturn in the signing of building contracts leading to a fall in the business turnover. Both McMansion Building Services and Sarah qualify for the JobKeeper Scheme.
McMansion Building Services gives Sarah a JobKeeper enabling stand down direction to only attend work 1 day per week, as opposed to her usual 5.
McMansion Building Services must pay Sarah her usual hourly rate for the 1 days work. The wage amount paid for this work can be more than the $1,500 wage subsidy amount, but cannot be less than that amount.
Example: McMansion Renovation Services employs two full time designers (John and Jo). McMansion Renovation Services and John and Jo are all eligible for the JobKeeper Scheme.
For the past 3 weeks, McMansion Renovation Services, have had no enquires regarding renovation work nor have they received any requests for an appointment to further discussions with previously interested clients regarding the design of, for example, a second storey addition as a result of the Government’s requirements regarding social distancing and other COVID-19 health and hygiene requirements.
McMansion Renovation Services decides to stop offering customised design services as a result of the impact of COVID-19. After consulting with John and Jo, McMansion Renovation Services issues a JobKeeper enabling stand down direction that John and Jo cannot be usefully employed and can be directed to work no hours at all.
John and Jo are still employed by McMansion Renovation Services and will receive the JobKeeper payment of $1,500 per fortnight before tax.
Q. What is a JobKeeper enabling direction regarding the performance of duties and the location of work?
Performance of duties
An eligible employer may direct an eligible employee to perform any duties that are:
- within the employees skill and competency;
- safe to be performed having regard to COVID-19;
- if a qualification is required to carry out that work, that the employee has the required license or registration; and
- reasonably within the scope of the employers business operations.
Example: McMansion Building Services employs Pete, who is a carpenter. Due to a downturn in activity as a result of COVID-19 Pete is no longer needed to perform carpentry work. Instead, McMansion Building Services needs more staff carrying out final site inspections due to homeowners wanting to move into their new homes quicker. Pete is comfortable with performing final inspections and agrees to the change in duties.
Location of work
An eligible employer may direct an eligible employee to perform duties at a difference place from the employees normal place of work if:
- the place is suitable for the employees duties; and
- if the place is not the employees home, the place does not require the employee to travel a distance that is unreasonable in all the circumstances including COVID-19; and
- the performance of the employees duties at the place is:
- Safe having regard to the nature and spread of COVID-19; and
- Reasonably within the scope of the employer’s business operation.
In the normal course of a day those in the residential building industry may already work on multiple sites per day. The above might be relevant for, for example a work, health and safety manager who is asked to carry out site inspections at various locations.
Q. How do I give a JobKeeper enabling direction?
Before giving a JobKeeper enabling direction an eligible employer must:
- Provide notice in writing at least 3 days before you intend to give a direction.
- Consult with the eligible employee/s about the proposed direction.
- Keep a written record of the consultation.
- Once you have decided to make a direction you must provide that direction in writing.
- Ensure that if making changes to an employee’s duties or work location you have information to support a reasonable belief that the direction is necessary to continue the employment of one or more employees. This belief must be:
- Based on “information”. This cannot be a simple whim or a view based on nothing. There needs to be some form of factual material before the employer that their role cannot be performed in the expected manner due to COVID-19 restrictions; and
- Reasonable. The belief must be available on the information the employer has before them and needs to be reasonably available; and
- Necessary to maintain the employment of the employee, for example, but for you doing this (directing different duties or a different work location) the employee would be made redundant. This is a quite high test and requires more than the JobKeeper direction being desirable or preferred but “necessary” to avoid this.
Q. Can I direct my employee to take annual leave?
Under the JobKeeper Scheme an eligible employer and an eligible employee may agree in writing to the employee taking twice as much paid annual leave at half the employees rate of pay.
An eligible employer can request an eligible employee to take paid annual leave provided that:
- The employer requests the employee to do so.
- The employee must consider and not unreasonably refuse the request.
- The employee will maintain a balance of paid annual leave of no fewer than two weeks.
Example: An employer and employee can agree to four weeks leave being taken, but the employee only has two weeks annual leave deducted and is only paid for two weeks annual leave.
Q. Does employee service continue to accrue for employees with adjusted work arrangements?
An employee’s period of service, i.e. the period of employment with the employer, will continue as if no JobKeeper enabling direction was issued. This means that an employee will continue to accrue annual leave, personal leave and long service leave based on their pre-JobKeeper employment arrangements.
The following are also to be calculated as if there was no direction given:
- Redundancy pay.
- Payment in lieu of notice of termination.
Q. What happens if the employer no longer eligible for the JobKeeper Scheme?
If you are no longer eligible for the JobKeeper Payment, any JobKeeper enabling direction will no longer have effect.
Q. How long are the changes in place?
The changes are intended to be temporary and will be subject to a review process commencing the end of July 2020. These are complex new laws and we strongly recommend you contact a HIA Workplace Adviser or your business accountant for assistance.
Q. What if there is a dispute about a JobKeeper enabling direction?
The Fair work Commission (FWC) may deal with a dispute about the operation of the amendments by way of mediation or conciliation, or by making a recommendation or expressing an opinion or by binding arbitration.
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This fact sheet is part of a series on JobKeeper Payment aimed at assisting members understand the requirements. More information is set out in:
#1 The JobKeeper Payment - Overview
#2 The JobKeeper Payment - Eligibility
#3 The JobKeeper Payment - Applying
#4 The JobKeeper Payment – Receiving the Payment
#6 The JobKeeper Payment – Record Keeping and Reporting Requirements
The Federal Government has released the following information:
Contact a HIA Workplace Adviser on 1300 650 620 for further information and advice
Current at: 16 April 2020