As part of its extension of the Jobkeeper support package to combat the economic effects of the COVID pandemic, the government has secured passage of further changes to the Fair Work Act 2009 (“FW Act”). Will these changes affect your employees? EMA Consulting will host a webinar on the topic on 22 September at 2:00 pm (ACST).
The JobKeeper scheme is available to employers who meet eligibility criteria, as outlined in previous EMA Notes. The scheme has been extended beyond its initial end date of 27 September 2020, but with reductions in the level of JobKeeper payment.
This EMA Note summarises the most important industrial relations changes from 28 September. EMA Consulting does not provide advice about eligibility for the Jobkeeper scheme or payments under it. Employers should seek advice from their qualified accountants.
FW Act changes - summary
Under the changes to the FW Act, employers who were previously eligible for Jobkeeper payments but are not currently eligible may still access some industrial relations flexibilities if they have a 10% reduction in quarterly turnover and meet other criteria resulting from the effects of COVID 19 and associated restrictions. This group of employers has been referred to as “legacy employers”.
Currently eligible employers
Employers who continue to meet the current eligibility requirements (eg 30% drop in turnover) will largely keep their current FW Act flexibilities under the current rules. The major exceptions are:
the ability to request reductions in leave balances will be repealed (and agreements made under it will lapse);
any direction to reduce an employee’s hours may be unreasonable if it operates unfairly on some employees compared to others in the same category.1
Safeguards still include:
a minimum payment guarantee, of the greater of the employee’s ordinary pay (subject to hours worked) or the Jobkeeper fortnightly allowance;
no reduction in the employee’s hourly rate of pay;
strict requirement for evidence that the changes are necessary to preserve employment for some or all employees; and
strict consultation obligations for directions to employees, including keeping a written record of the consultation and the directions.
New sections have been added to the FW Act for employers who once were eligible for Jobkeeper payments but no longer meet the criteria and who suffer a 10% decline in quarterly turnover. The rules about how the reduction is measured and substantiated are strict. Employers with over 15 employees will need a certificate from an independent financial services body.
Legacy employers will also have to establish that the flexibilities are required to maintain employment and are necessary because of the impact of COVID or associated restrictions. Available FW Act flexibilities for this group of employers will include such things as:
ability to reduce hours, but not below 60% of the pre-COVID hours and not below two hours on any day.
directing employees to perform other duties within their skill, or at other reasonable locations; and
making agreements with employees to work on other days or at other times, which they cannot unreasonably refuse.
These flexibilities may occur even if contrary to contracts, awards or enterprise agreements. They cease to have effect if the eligibility conditions cease to apply.
Additional complex safeguards include:
extended consultation periods of at least seven days before issuing directions; and
pecuniary penalties of up to $13,200 for individuals and $66,600 for employers who do not meet the 10% reduction test but try to use the flexibility provisions.
Require further information/assistance?
If you require further information or advice, please contact one of our consultants. If you would like to attend EMA Consulting’s webinar on these changes to the Fair Work Act, details of content and how to book can be found here.
1 This specific addition to the Act reflects recent decisions of the Fair Work Commission