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Extending JobKeeper Fair Work Act Provisions into Phase 2.0

When the Australian Government introduced a raft of measures to help support and stimulate the economy in the wake of the COVID-19 pandemic, there were implications beyond just the financial when it came to implement the changes. Of particular note is the JobKeeper wage subsidy, which was brought in to assist businesses in continuing to pay their employees despite a downturn in revenue (more info on JobKeeper here). When JobKeeper came into effect, Fair Work Australia introduced some temporary provisions to the Fair Work Act (The Act) in order to give certain employers the flexibility to manage their workplaces effectively during the pandemic, and guidance on navigating the rules around standing employees down, reducing hours, changing the location of work, and more.

JobKeeper Fair Work Act Provisions – An overview

As mentioned above, Fair Work Australia added some temporary provisions to The Act to enable employers to effectively manage their businesses and employees within the guidelines of both JobKeeper and The Act itself. Employers can access these provisions if they qualify for JobKeeper or are a “legacy employer” (more on that later).

Under the provisions, eligible employers who are impacted by COVID-19 are able to give their employees what are known as “enabling directions”, meaning they can stand an employee down, reduce their hours, or change their usual days of work, their usual duties and/or where they perform those duties – without being in breach of the Fair Work Act. These enabling directions conclude when they’re cancelled, withdrawn or replaced, or the day following the end of JobKeeper 2.0: 29 March 2021.

JobKeeper 2.0 Fair Work Act Provisions – What’s Changing?

Upon the introduction of JobKeeper 2.0, the provisions added into The Act were extended to line up with the new dates, from 28 September 2020 to 28 March 2021. Qualifying employers who are receiving JobKeeper payments for their employees in phase 2.0 may continue to use the provisions to give employees enabling directions (as detailed above) and make agreements with employees to change days or times of work. Employers who didn’t qualify for JobKeeper 1.0, but now qualify for JobKeeper 2.0, will also be able to access these provisions.

However, employers will now no longer be able to use the provisions to make agreements with employees to take annual leave (at either full or half pay); and existing enabling directions or agreements in place on or before 27 September will still apply in Phase 2.0, so long as the employer continues to qualify for JobKeeper.

Legacy Employers

Now that Fair Work Australia has extended the JobKeeper provisions in The Act, there is scope for some businesses, who don’t currently qualify for JobKeeper, to take advantage of some of the provisions. These provisions are the ability to issue JobKeeper enabling stand down directions, issue enabling directions relating to duties and location of work, and make agreements with employees regarding their days and times of work.

In order to do be able to apply these extended provisions as a Legacy Employer, the employer must have previously participated in the JobKeeper scheme, but is no longer participating as of 28 September, and they must demonstrate at least a 10% decline in turnover for a relevant quarter (by obtaining a certificate from an eligible financial service provider, or a statutory declaration for small businesses).

It is important to note that employers falling under the “legacy” category may only apply these provisions to employers for whom they received the JobKeeper subsidy before 28 September, but note that they don’t necessarily need to have received the payments for every fortnight of JobKeeper Phase 1.0. If an employer is not eligible as either a qualifying employer (i.e. one that receives the JobKeeper subsidy) or a legacy employer, then employees should be returning to their normal conditions of work under the Fair Work Act.

Next Steps

Navigating the tricky landscape of Government incentives like JobKeeper can be difficult. Especially when it comes to calculating your decline in turnover and dealing with the changes brought about by COVID-19, it’s smart to engage the services of a professional. The McKinley Plowman Accounting, Business Improvement and CFO2GO Bookkeeping teams have already helped dozens of clients with the testing and application processes around the stimulus package measures – so if you need assistance, don’t hesitate to get in touch today via out website or call us on 08 9301 2200.

Further Reading/References:

https://coronavirus.fairwork.gov.au/coronavirus-and-australian-workplace-laws/pay-and-leave-during-coronavirus/jobkeeper-wage-subsidy-scheme/legacy-employers

https://coronavirus.fairwork.gov.au/coronavirus-and-australian-workplace-laws/pay-and-leave-during-coronavirus/jobkeeper-wage-subsidy-scheme/extension-of-jobkeeper-provisions-in-the-fair-work-act

https://coronavirus.fairwork.gov.au/coronavirus-and-australian-workplace-laws/pay-and-leave-during-coronavirus/jobkeeper-wage-subsidy-scheme#JobKeeper%20provisions

written by:

Claire Ginbey

Heading up our CFO2GO team, Claire's skills as a SME Business Specialist and cloud accounting specialist have developed in line with advancements in technology and best practice; allowing her to maintain the highest service standards for clients.

Claire's passion for growing small businesses and helping them achieve sustained success is what motivates her to continuously develop her skills and knowledge. Her clients appreciate her considered and dedicated approach to working with them, and her personal oversight across their operations and financial performance.