COVID 19 RESPONSE
In response to the COVID-19 crisis and to assist with the implementation of the #JobKeeper scheme, the Australian Government yesterday passed temporary amendments to the Fair Work Act. The focus of attention has been on the Job Keeper payment, introducing wage subsidies which Industrial Relations Minister Christian Porter said are “temporary but critical” and “will allow the $1,500 (a fortnight Job Keeper) payments to lawfully flow and a number of other flexibilities that will be job-saving”.
However the legislation also allows for much more flexibility to allow employers who qualify for the Job Keeper Scheme to make lawful “Job Keeper-enabling stand downs” to employees eligible for the scheme.
These welcome changes will be safety-netted by all decisions being reviewable by the Fair Work Commission.
A snapshot of the changes to the Fair Work Act are outlined below.
What is a ‘Job Keeper-enabling stand down’?
It is important to recognise in the first instance that a Job Keeper-enabling stand down differs significantly from a ‘stand down’ as defined by relevant industrial instruments, contracts of employment and section 524 of the Fair Work Act, whereby an employee still remains employed by a business but no longer completes work and therefore is no longer paid.
A Job Keeper-enabled stand down will allow an eligible employer to temporarily reduce or alter an eligible employee’s:
- Days worked
- Location of Work (where in all circumstances it is safe and reasonable to do so)
- Duties (where in all circumstances it is safe and reasonable to do so)
Furthermore, it will allow employers to reach arrangements where employees take paid annual leave, including at half pay. The caveat is that an employee’s annual leave entitlement does not fall below two weeks.
How is a Job Keeper-enabling stand down to be implemented?
Reduction in Hours
A reduction in hours can only be implemented where an eligible employee cannot be usefully employed at their full hours, taking into consideration the pandemic and government and policy response to stop the spread of COVID-19.
You can only move to alter an employee’s hours where, as a result of COVID-19, there is either no work or limited work compared to what the employee would usually do.
The reduction in hours must be reasonable and their hourly rate must not change. You can alter an employee’s hours but you cannot change what is owed to them under a relevant industrial instrument.
An employee who has reduced hours as a result of a Job Keeper-enabled stand down can ask their employer for the ability to seek secondary employment.
Changes to Duties and Location of Work
Changes to duties and location of work can only be made where these changes are necessary to ensure an employee’s continued employment and can only be made where it is safe and reasonably practical to do so. Any changes to duties must be within an employee’s level of skill, qualifications and competency and can only be done within the scope of the business.
Changes to Days Worked
Employers and employees can agree to application of days worked i.e. an employee may be requested to work Monday, Tuesday and Wednesday instead of their usual days of work Wednesday, Thursday and Friday.
This arrangement can only be executed on agreement by the employee but the legislation states that an employee cannot unreasonably refuse to make such an agreement.
Request to take Annual Leave
Similar to the changes to days worked, employers and employees can agree to reduce an employee’s annual leave entitlement by having them take leave.
Again, this arrangement can only be implemented on agreement by the employee, and the employee cannot unreasonably refuse to make such an agreement.
Employers can only make such a request where an employee will retain a two week annual leave entitlement.
The introduction of these changes will allow employers flexibility in these challenging times and potentially save many jobs. We recommend that all employers who are eligible for Job Keeper payments, clearly understand these changes. The above outlines a general snapshot of these changes and it is extremely important that you get the appropriate advice prior to the implementation of a Job Keeper-enabled stand down.
For help in understanding and implementing the new arrangements please contact us on (02) 8021 4206 – or email us on email@example.com.