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JobKeeper 2.0 fact sheet 5 - JobKeeper enabling directions

JobKeeper 2.0 will provide eligible employers with a wage subsidy to eligible employees from 28 September to 28 March 2021. JobKeeper 2.0 is an extension of the original JobKeeper Payment (JobKeeper 1.0) which will end on 27 September.

JobKeeper 2.0 has made changes to the amount of the wage subsidy and the turnover test:

JobKeeper 1.0 JobKeeper 2.0
Eligible employees average hours worked in 28 days before 1 March 2020 or 1 July 2020 30 Mar 2020 - 27 Sept 2020 28 Sept 2020 - 3 Jan 2021 4 Jan 2021 - 28 Mar 2021
More than 20 hours $1,500 per fortnight
$1,200 per fortnight $1,000 per fortnight
Less than 20 hours $750 per fortnight $650 per fortnight
Turnover Test GST turnover has or will be reduced by more than 30 % relative to a comparable period a year ago. Must demonstrate a 30% decline in actual GST turnover during the relevant quarter.
Turnover Test Period A month or quarter, compared to the same month or quarter in 2019 (March 2019 compared to March 2020 or quarter starting on 1 July 2020 compared to the same quarter in 2019). September quarter 2020 (July, August, and September) compared to the same quarter in 2019. December quarter 2020 (October, November and December) compared to the same quarter in 2019.

Once a business is eligible, similar to JobKeeper 1.0, JobKeeper 2.0 provides employers with access to a range of measures to temporarily provide greater flexibility in relation to hours of work, called JobKeeper enabling directions.

There are new rules for those employers who were eligible for JobKeeper 1.0 and took advantage of some of these flexibilities but are now ineligible for JobKeeper 2.0.

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. Can I still rely on a JobKeeper enabling directions if I am ineligible for JobKeeper 2.0?

Yes, if you are a Legacy Employer.

A Legacy Employer is an employer who:

  • qualified for JobKeeper 1.0 prior to 28 September; and
  • does not qualify for JobKeeper 2.0; and
  • can show a 10 percent decline in current GST turnover.

If you currently have a direction in place, but are a Legacy Employer any existing directions will automatically cease to have effect from 28 September. Any directions will need to be reissued and comply with the rules relating to the directions that a Legacy Employer can issue, notification and consultation requirements.

Q. If I am a Legacy Employer what type of JobKeeper enabling directions can I issue?

From 28 September a Legacy Employer can issue JobKeeper directions relating too:

  • Changes to the current employment arrangements. An employer may require an employee to:
    - Work at least 60 percent of the employees ordinary hours as at 1 March 2020. The employee must work at least 2 consecutive hours in a day.
    - Work at an alternative location; or
    - Undertake alternative duties.

An employer can also request that the employee work different days/times to their ordinary hours/days (as long as the agreement does not require the employee to work less than 2 consecutive hours in a day). This request cannot be unreasonably refused.

Q. How do I demonstrate a 10 percent decline in turnover?

The 10 percent decline in current GST turnover test requires that:

  • Between 28 September and 27 October 2020, a Legacy Employer must have a 10 percent decline in turnover certificate or self-certify the decline in turnover for the June quarter (April, May and June) compared to the June quarter 2019.
  • Between 28 October and 27 February 2021, a Legacy Employer must have a 10 percent decline in turnover certificate or self-certify the decline in turnover for the September quarter (July, August and September) compared to the September quarter 2019.
  • Between 28 February 2021 and 28 March 2021, a Legacy Employer must have a 10 percent decline in turnover certificate or self-certify the decline in turnover for the December quarter (October, November and December) compared to the December quarter 2019.

These dates align with the BAS lodgement dates.

You must obtain a 10 percent decline in turnover certificate or self-certify the decline in turnover for each quarter to continue to be eligible.

In order to prove the decline a business must:

  • Obtain a 10 percent decline in turnover certificate from a financial service provider; or
  • If they choose to, self-certify where the employer is a small business with less than 15 employees.

Q. Which financial service provides can issue a decline in turnover test certificate?

  • A registered tax agent, BAS agent; or
  • A qualified accountant.

A financial service provider does not include directors, employees or an associated entity of the employer.

Q. How do small businesses self-certify?

The declaration must be made by an individual who either is, or is authorised by the employer and who has knowledge of the financial affairs of the business.

Q. I was eligible for JobKeeper 1.0 and I am also eligible for JobKeeper 2.0 - What steps do I need to take to extend a JobKeeper enabling direction that was issued prior to 28 September 2020?

Any directions in place prior on 27 September will automatically carry over from 28 September if you remain eligible to give that direction.

It is however recommended that you review any directions issued.

Q. Under JobKeeper 2.0 how do I give a JobKeeper enabling direction?

Before giving a JobKeeper enabling direction an eligible employer must:

  1. Provide notice in writing at least 3 days before you intend to give a direction.
  2. Consult with the eligible employee/s about the proposed direction.
  3. Keep a written record of the consultation.
  4. Once you have decided to make a direction you must provide that direction in writing.
  5. 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; 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.

Any disputes regarding a JobKeeper enabling direction can be dealt with by the Fair Work Commission.

Q. I am a Legacy Employer – how do I issue a JobKeeper enabling direction?

Before a Legacy Employer gives a JobKeeper enabling direction you must:

Consult at least 7 days before you intend to give the direction and:

  • Provide written notice of the employers intention to give the direction.
  • Keep a written record of the consultation.
  • Provide the employee with information about the proposed direction.
  • Invite the employee to give their views about the impact of the proposed direction on the employee. Employers must give prompt and genuine consideration to these views.

For each quarter that you wish the directions to apply to you must notify employees before 28 October 2020 and 28 February 2021 regarding whether a direction/request currently in operation will either:

  • Continue to apply as a result of the employer continuing to satisfies the 10 percent decline in turnover test; or
  • Will cease to apply on the basis that the employer no longer satisfies the 10 percent decline in turnover test.

Q. What is a JobKeeper enabling stand down direction?

Different requirements apply if you are eligible for JobKeeper 2.0 or if you a Legacy Employer.

JobKeeper 2.0

 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.

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 an actual decline in turnover of at least 30 percent during July, August and September downturn. Both McMansion Building Services and Sarah qualify for JobKeeper 2.0.

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 amount paid can be more than the $1,200 wage subsidy amount, but cannot be less than that amount.

Example: McMansion Building Services also employs 2 full time sales consultants (John and Jo) who staff a display home. McMansion Building Services and John and Jo are all eligible for JobKeeper 2.0.

For the past 3 weeks, McMansion Building Services has had no one through the display home nor have they received any requests for an appointment to come through the home as a result of the Governments requirements regarding social distancing and other COVID-19 health and hygiene requirements.

McMansion Building Services decide to close the display home as a result of the impact of COVID-19. After consulting with John and Jo, McMansion Building 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 Building Services and will receive the JobKeeper payment of $1,200 per fortnight.

Legacy Employer

A Legacy Employer may issue a JobKeeper enabling stand down direction to an eligible employee to work a reduced number of hours or days to a minimum of 60 percent of an employee’s ordinary hours (as assessed on 1 March 2020) but cannot result in an employee working less than two consecutive hours in a day that they work.

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.

An employees ordinary hours at 1 March are the ordinary hours that the employee has been contracted to do, not the actual hours the employee did or did not work.

Example: As an eligible employer under JobKeeper 1.0 you reduced your full time receptionist Annes hours to 3 hours per day. As you are not eligible for JobKeeper 2.0 but have experienced a decline in actual GST turnover of at least 10 percent you are a Legacy Employer. As a Legacy Employer, from 28 September, you can issue a new JobKeeper enabling stand down direction which requires Anne to work a minimum of 22.8 hours per weeks (60% of her ordinary hours on 1 March 2020). Anne will work 5 hours on Monday, Tuesday and Wednesday, 7.84 hours on Thursday and no hours on Friday, this meets the requirement that Anne must work at least 2 consecutive hours on each day Anne works.

You must also comply with the notice and consultation obligations (outlined above).

Considerations under JobKeeper 2.0 and for Legacy Employers issuing JobKeeper enabling stand down direction

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 or 1 July will be eligible.

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. 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 JobKeeper 2.0 and is not a Legacy Employer?

If you are no longer eligible for the JobKeeper Payment, any JobKeeper enabling direction will no longer have effect.

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

Further information

This fact sheet is part of a series on the JobKeeper Payment aimed at assisting members understand the requirements. More information is set out in:

#1 JobKeeper 2.0 - Overview

#2 JobKeeper 2.0 - Eligibility

#3 JobKeeper 2.0 - Applying

#4 JobKeeper 2.0 – Receiving the Payment

#6 JobKeeper 2.0 – Record Keeping and Reporting Requirements

The Federal Government and ATO has released the following information to assist businesses understand the scheme:

Contact a HIA Workplace Adviser

1300 650 620

or email enquiry@hia.com.au

Current at: 25 September 2020
HIA ref no: NFSIRE1367

 

Fact sheet 1 | Fact sheet 2 | Fact sheet 3 | Fact sheet 4 | Fact sheet 5 | Fact sheet 6