In our Employment Update dated 9 April 2020 we wrote about the unprecedented legislation which had been passed enabling employers eligible for JobKeeper to issue directions to staff requiring them to work reduced hours or be stood down completely. That legislation had a sunset date of 27 September 2020.
The Commonwealth Parliament has this month passed further legislation extending the operation of the legislation for JobKeeper employers until 29 March 2021. It also empowers employers no longer eligible for JobKeeper but whose turnover has decreased by at least 10% to keep issuing directions until 29 March 2021 albeit with some restrictions and subject to some greater procedural requirements. Employers in this category are referred to as “legacy employers”.
The key features of the new legislation are as follows:
JobKeeper employers
Employers who:
- have been in receipt of JobKeeper payments from the Commonwealth and continue to be so; or
- employers who become newly eligible for JobKeeper,
will be entitled to issue JobKeeper directions to those of its staff who are receiving JobKeeper payments. This can continue until 29 March 2021, subject to the employer still being a JobKeeper employer. JobKeeper directions issued before the sunset date of the initial legislation, being 27 September 2020, will automatically continue beyond that date and do not need to be re-issued or refreshed in any way.
Legacy employers
Legacy employers are those employers who:
- had previously been participating in the JobKeeper scheme up until 27 September 2020 but not participating beyond that date; and
- whose turnover for quarters going forward (eg quarter ending 30 September 2020 and 31 December 2020) has actually declined by at least 10% relative to the same period last year.
Legacy employers will need to satisfy the decline in turnover test by obtaining a certificate from their accountant although small businesses with less than fifteen staff may satisfy the requirement by way of a sworn Statutory Declaration.
Such legacy employers may continue issuing directions to work reduced hours to those of its staff who had previously been in receipt of JobKeeper payments. However such directions cannot result in:
- an employee working less than 2 hours on a work day; or
- reduce an employee’s hours of work to less than 60% of their ordinary hours as at 1 March 2020.
The procedural requirements that legacy employers need to comply with include:
- re-issuing any directions issued prior to 27 September 2021 as all prior ones expire on that date in respect of legacy employers;
- notifying any employees to whom they issue a direction that the employer is in possession of the requisite certificate or statutory declaration concerning the decline in turnover; and
- giving employees at least seven days notice of the employer’s intent to issue a direction (whereas JobKeeper employers only have to provide three days notice);
- consulting with the employee, which is also the case for JobKeeper employers.
Given the extent of the second lock-down currently being experienced in Victoria it can be expected that a great many Victorian businesses, particularly in hard hit sectors such as hospitality and tourism, will remain JobKeeper employers beyond 27 September 2020. However businesses in other sectors, not subject to the same level of government restrictions and which may have adapted to remote work, may transition to legacy employers.
If you do need any advice about your employment arrangements in the current environment then please feel free to contact Michael Bishop, Amelita Hensman or Ben Drysdale.
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