JobKeeper scheme

Under the JobKeeper scheme, qualifying businesses and not-for-profit organisations significantly affected by COVID-19 can access a subsidy from the Australian Government so that they can keep paying their employees.

Qualifying employers can claim a reimbursement of $1500 per fortnight for their eligible employees who were employed as at 1 March 2020 and who are currently employed by the employer (JobKeeper payment). An employer that elects to participate in the JobKeeper scheme is required to include all of its eligible employees.

The payments can apply to eligible employees from the fortnight starting on 30 March 2020.

JobKeeper payments for eligible employees will be paid to the employer by the ATO monthly in arrears, beginning in May 2020. The employer must have already paid an amount that is at least equal to the JobKeeper payment to their eligible employees.

The JobKeeper payment of $1500 is before tax (gross).

For employers

Employers can register for the JobKeeper scheme on the ATO website.

The ATO has information on how the scheme works, eligibility requirements for employers and for sole traders and other entities, and the steps to enrol for the payment.

For employees

Employees can access relevant information on the JobKeeper scheme on the ATO website. The ATO has information about steps employees can take and employee test requirements

Who can use the Fair Work Act JobKeeper provisions

In order to give a JobKeeper enabling direction or make an agreement under the new Fair Work Act JobKeeper provisions, an employer needs to:

  • be a national system employer in the Fair Work system
  • qualify for and have registered for the JobKeeper scheme 
  • be entitled to JobKeeper payments for the employee to whom the direction or agreement applies.

If an employer meets these criteria, they are a ‘qualifying employer’ and can use the Fair Work Act JobKeeper provisions for each employee they are entitled to a JobKeeper payment for (the 'eligible employee').

A qualifying employer is only authorised to make directions or agreements under the new provisions during periods for which they claim the JobKeeper payment for an eligible employee.

Employers should confirm that they are entitled to JobKeeper payments for their employees before issuing a direction or making an agreement under the new provisions. Go to the ATO website for more information about who is eligible.

Direction to reduce hours or days of work – JobKeeper enabling stand down directions

The new provisions enable a qualifying employer to direct the eligible employee to work fewer hours or days (including no hours) in certain circumstances.

These directions are called ‘JobKeeper enabling stand down directions’. Employers can only give an employee a JobKeeper enabling stand down direction:

  • if the employee can't be usefully employed for their normal days or hours because of changes to business attributable to the coronavirus pandemic, or
  • because of government initiatives to slow the transmission of COVID-19 (for example, because of an enforceable government direction).

The direction must also be implemented safely, including having regard to the nature and spread of COVID-19.

An employer needs to make sure that the direction isn’t unreasonable, taking into account all of the circumstances, including the employee’s caring responsibilities. If a direction is unreasonable, it does not apply to an employee.

A JobKeeper enabling stand down direction must be in writing. Employers also need to:

  • notify the employee and consult the employee (or their representatives) at least 3 days before issuing the direction (unless the employee genuinely agrees to a shorter timeframe)
  • keep a written record of the consultation.

If an employee is taking paid or unpaid leave (such as annual leave) or is otherwise entitled to be absent from work (such as on a public holiday), the direction doesn’t apply. If the employee normally receives a leave payment that would be less than the JobKeeper payment for a fortnight, the employee is still entitled to an amount that is equal to the JobKeeper payment for the fortnight. Employees need to either be paid normally during these periods, or $1500 (before tax) – whichever is more.

Employees subject to a JobKeeper enabling stand down direction still accrue their usual leave entitlements for the period the direction applies (as if the direction hadn't been given to them). Service is considered continuous for the purposes of redundancy and pay in lieu of notice (i.e. it counts as time worked).

Employees who are subject to a JobKeeper enabling stand down direction can request to take on secondary employment, training or professional development. Employers must consider these requests and can’t unreasonably refuse them.

JobKeeper payment and payment of wages

When an employee is subject to a JobKeeper enabling stand down direction (to not work on certain days, to work for a lesser period, or to work for a reduced number of hours), the employer must pay them either the JobKeeper payment or their usual pay for any hours that the employee does work – whichever is more. The employee’s hourly base pay rate can’t be reduced.

Direction to change usual duties or location of work

Direction to change duties

A qualifying employer can direct the eligible employee to perform any duties that are within their skill and competency so long as:

  • the duties are safe (including having regard to the nature and spread of coronavirus)
  • the employee has any required licenses and/or qualifications to perform the duties
  • the duties are reasonably within the scope of the employer’s business operations.

Directions to change location

A qualifying employer can direct the eligible employee to perform duties at a place that is different from the employee's normal place of work, including at the employee's home. Employers must make sure that:

  • the location is suitable for the employee’s duties
  • the employee is not required to travel an unreasonable distance in all the circumstances (including those surrounding COVID-19)
  • it is safe for the employee to perform their duties at the new location
  • the duties are reasonably within scope of the business’s operations
  • the employee performing their duties at the new location is reasonably within the scope of the employer’s business operations

Safeguards applying to directions about duties and location

An employer needs to make sure that the direction isn’t unreasonable taking into account all of the circumstances, including the employee’s caring responsibilities. If a direction is unreasonable, it does not apply to an employee.

The employer must also reasonably believe that the direction about duties or location is necessary to continue the employment of one or more employees.

How to make a direction to change duties and/or location of work

Employers need to:

  • notify the employee and consult with the employee (or their representatives) at least three days before issuing the direction (unless the employee genuinely agrees to a shorter timeframe)
  • make the direction in writing
  • keep a written record of the consultation.

JobKeeper payment and payment of wages

When an employee is subject to a JobKeeper enabling direction about location or duties, the employer must pay them either the JobKeeper payment or their usual pay for any hours that the employee works (whichever payment is higher). The employee’s hourly base pay rate cannot be reduced.

If a higher hourly base pay rate applies to the new duties an employee is performing, they must receive at least that higher pay rate while performing those duties.

Service is considered continuous for the purposes of redundancy and pay in lieu of notice (i.e. it counts as time worked).

Agreement to work different days and times

The new provisions also enable a qualifying employer to agree with an eligible employee that they will perform their usual duties on different days or times than usual. The employer needs to make sure that:

  • performance of the duties on different days or at different times is safe considering the nature and spread of COVID-19 and is reasonably within scope of employer’s business operations
  • the employee’s usual work hours aren't reduced (reducing work hours would require a JobKeeper enabling stand down direction).

If an employer asks their employee to make these changes, the employee has to consider the request, and can’t refuse it unreasonably. Any agreement must be recorded in writing.

Agreement to take annual leave

The new provisions enable a qualifying employer:

  • to request an eligible employee to take paid annual leave (if they keep a balance of at least two weeks)
  • to agree in writing with that employee for them to take annual leave at half their usual pay for twice the length of time.

Employees who make an agreement to take annual leave still accrue their usual leave entitlements for the period the agreement applies (as if the agreement hadn't been made). Service is considered continuous for the purposes of redundancy and pay in lieu of notice (i.e. it counts as time worked).

If an employer asks their employee to take annual leave, the employee has to consider the request, and can’t unreasonably refuse it.

Interaction with minimum entitlements and other terms and conditions of employment

For the period of time that an employee is subject to a direction or agreement made under the Fair Work Act JobKeeper enabling provisions, the employee’s usual terms and conditions of employment (for example under a modern award, enterprise agreement or employment contract) continue to apply. However, the JobKeeper enabling direction or agreement will apply instead if the direction or agreement is different to the employee's usual terms and conditions. 

Any directions or agreements made under these new provisions can’t reduce minimum pay rates and other monetary entitlements under the Fair Work Act.

This means that:

  • if an employer reduces an employee’s hours or days of work under a JobKeeper enabling stand down direction, the employee needs to be paid their usual base pay rate for the work they’re still performing
  • if an employer changes an employee’s duties, the employer must pay the employee the higher of:
    • the base pay rate that applies to their previous duties, or
    • the base pay rate that applies to the new duties the employee is performing.

You can use the Fair Work Ombudsman’s Pay and Conditions Tool to calculate the base pay rate from an award.

Directions and agreements under the new provisions are temporary measures connected to the impacts of the COVID-19 pandemic. This means that when the provisions end on 28 September 2020, any directions or agreements made under them will also end, and employees’ terms and conditions will revert back to what they were without the directions or agreements in place. 

Dealing with disputes

The Fair Work Commission (the Commission) has the power to hear disputes and make orders about the new JobKeeper provisions under the Fair Work Act. 

Employees, employers, employee and employer organisations, can apply to the Commission to deal with a dispute. Visit the Fair Work Commission - JobKeeper disputes, for more information and to apply.

Enforcement

The ABCC can enforce a number of the provisions relating to the JobKeeper scheme that are about ensuring minimum wages and conditions and preventing misuse of JobKeeper enabling directions by employers in the building and construction sector.

We can also enforce general protections relating to the new provisions (for example, the right to refuse or exercise a workplace right).