Fortunately, we learned last month that 28 September was not going to be the JobKeeper cliff the government had originally planned. The extension of the JobKeeper Payment for the two quarters to 28 March 2021 will assist some eligible businesses to postpone tough decisions regarding the employment of staff in the ‘new normal’.
While this extension to the JobKeeper Scheme is welcome, keeping up with all the amendments is tough. The Scheme’s effect on an employer’s ability to amend an employee’s terms of employment is summarised below.
The traditional stand down provisions in the Fair Work Act were too inflexible to cope with COVID so temporary Coronavirus Economic Response provisions were inserted into the Fair Work Act. These allow employers that are accessing the JobKeeper Payments to issue:
- directions that vary their employees’ number of hours, duties and location; and
- requests to make an agreement about changes to days and times of work, and taking annual leave (which can’t be unreasonably refused).
Without the temporary provisions, these measures would normally be UNLAWFUL and would normally result in claims for compensation and penalties.
The temporary Coronavirus Economic Response provisions were due to be repealed on 28 September 2020 but the Coronavirus Economic Response Package (JobKeeper Payments) Amendment Bill 2020 is before Parliament this week. It will extend the temporary provisions (for employers that are eligible under a quarterly ‘10% decline in turnover’ test) to 21 March 2021.
Those employers who have benefitted from JobKeeper Payments to date but won’t meet the new JobKeeper Payment eligibility criteria after 28 September will retain some (but not all) powers to alter their employees’ normal working conditions until 21 March 2021 – provided they exercise that power with a ‘10% decline in turnover certificate’ in hand.
To get the certificate each quarter, these employers will need an accountant to certify that they have suffered a 10% decline in turnover for the previous quarter – to end June, September and December. (Small employers with less than 15 employees can self-certify).
These partially recovered employers will be able to reduce an employee’s normal hours (as at 1 March 2020) as much as 60% and direct them to perform alternative duties. They can request agreement about changes to days and times of work, BUT NOT the taking of annual leave (other than as per normal award regulations).
As with any law, there are limits to this power; you can’t reduce hours if an employee can be usefully employed, the duties must be safe, provide a minimum two hours of work per occasion and provide seven days’ notice of these directions. Consult with employees and give them written notice about whether JobKeeper directions continue or cease to operate (depending on the employer’s ongoing eligibility).
Temporary powers to alter employees’ terms and conditions of employment have been inserted into many modern awards. These temporary flexibilities are available to employers (regarding those employees who are covered by these awards) regardless of whether the employers are eligible to receive JobKeeper Payments. These awards can be accessed at fwc.gov.au.
Cowboy warning: Unless your business is in receipt of JobKeeper Payments, has a certificate, or is covered by an award or agreement that has temporary flexibilities, you can’t make significant unilateral changes to an employee’s normal working conditions without exposing your business to the risk of claims and penalties.
Even if you are eligible to access these temporary measures, failure to comply with applicable criteria like consulting first and providing 3 or 7 days’ written notice will mean the usual fair go restrictions apply. Using the right powers in the wrong way will also expose your business to the risk of claims and penalties.
Claims against cowboy employers who have disregarded the limits to these temporary flexibilities have already started to flow; unfair dismissals, underpayment claims and penalties for breaching terms of modern awards that regulate when and how you can direct an employee to take annual leave.
So in your attempts to brace your business for the ‘new normal’, take care not to expose the business to the much greater expense of responding to unnecessary claims:
- When terminating employment, remember that employees are entitled to the greater notice period of that contained in their employment contract and the National Employment Standards. Check their contract!
- If coming up with severance payments is not possible, the Fair Work Commission can reduce this liability on application (be prepared to justify the application with evidence of your financial position).
- When issuing JobKeeper directions, ensure they accurately reflect the current operational needs of the business and don’t use them as a contingency plan. (It is better to issue multiple directions to adapt to changing needs than to issue directions that are disproportionate).
- One-size-fits-all stand down directions are likely to land you in strife. Take into account the pre-existing entitlements of employees and whether your proposed direction would have a disproportionate or unfair effect on any particular category of employee.
- Take into account the access some staff have to accrued leave entitlements. The Commission has been supporting employer JobKeeper requests to staff to reduce their annual leave balances to two weeks.
The purpose of these temporary flexibilities is to keep businesses afloat and workers in jobs. But they have their limits. Employers who disregard these limits are just adding another cash flow problem to the mix.